184.For each of the following errors, considered individually, indicate whether the error would cause the adjusted trialbalance totals to be unequal. If the error would cause the adjusted trial balance total to be unequal, indicate whetherthe debit or credit total is higher and by how much.
a)The adjustment for unearned fees of $3,260 was journalized as a debit to AccountsPayable for $3,260 and a credit to Fees Earned of $3,260.
b)The adjustment for supplies expense of $425 was journalized as a debit to SuppliesExpense for $542 and a credit to Supplies for $425.
185.Using the following account balances for Garry’s Tree Service, prepare a trial balance.
Cash$25000
Supplies1,000
Accounts Payable7,000
Common Stock32,910
Wage Expense2,000
Machinery18,350
Wages Payable3,600
Service Revenue21,000
Rent Expense11,500
Unearned Revenue1,500
Accumulated Depreciation—Machinery7,340
Prepaid Rent12,200
Dividends3,300
186.Indicate whether the following error would cause the adjusted trial balance totals to be unequal. If the error wouldcause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by howmuch.
The entry for $975 of supplies used during the period was journalized as a debit to Supplies Expense for $795 andcredit to Supplies for $975.
187.Indicate whether the following error would cause the adjusted trial balance totals to be unequal. If the error wouldcause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by howmuch.
The adjustment for accrued fees of $1,170 was journalized as a debit to Accounts Receivable for $1,170 and acredit to Fees Earned for $1,107.
188.What is the purpose of an adjusted trial balance? What type(s) of error does it detect? What type(s) of error doesit not detect?
189.Two income statements for Midnight Enterprises are shown below:
Midnight EnterprisesIncome Statement
For Year 1 and Year 2, Ended December 31
Year 2
Year 1
Fees earned$674,350$520,600
Operating expenses472,045338,390
Operating income$202,305 $182,210
(a) Prepare a vertical analysis of Midnight Enterprises’ income statements.
(b) Does the vertical analysis indicate a favorable or unfavorable trend?