228.The unadjusted trial balance and the adjustment data for Porter Business Institute, Inc. are shown below along with adjusting entry information. What is the impact of the adjusting entries on the balance sheet? Show the calculation for total assets, total liabilities, and stockholders' equity without the adjustments; show the calculation for total assets, total liabilities, and stockholders' equity with the adjustments. Which one provides the most accurate presentation of the balance sheet?
Porter Business Institute, Inc.
Unadjusted Trial Balance
December 31
(in millions)
Cash$58,000
Accounts receivable59,000
Prepaid insurance12,000
Equipment8,000
Accumulated depreciation—equipment$2,000
Buildings57,500
Accumulated depreciation—buildings17,500
Land55,000
Unearned rent16,000
Long-term notes payable50,000
Common stock1,000
Retained earnings114,600
Tuition fees earned74,000
Training fees earned23,400
Wages expense32,000
Utilities expense8,000
Property taxes expense5,000
Interest expense4,000
Totals$298,500$298,500
229.Prepare adjusting entries for the year ended December 31, for each of these separate situations. Assume that prepaid expenses are initially recorded in asset accounts and that fees collected in advance are initially recorded as liabilities.
a. The Prepaid Rent account has a debit balance of $8,000 before adjustment, representing a prepayment for four months' rent made on December 1 of the current year.
b. One-third of the work related to $18,000 of cash received in advance was performed during this period.
c. Unpaid accrued salaries at December 31 amounts to $15,000.
d. Work was completed for a client on December 31 in the amount of $21,000, but was not previously billed or recorded.
e. Estimated depreciation on office equipment is $27,000.
a.Rent Expense2,000