Wham Company Accumulates the Following Adjustment Data at December 31

question 103

Essay

Wham Company accumulates the following adjustment data at December 31.
1. Revenue of $800 collected in advance has been earned.
2. Salaries of $600 are unpaid.
3. Prepaid rent totaling $450 has expired.
4. Supplies of $550 have been used.
5. Revenue earned but unbilled total $750.
6. Utility expenses of $400 are unpaid.
7. Interest of $150 has accrued on a note payable.
Instructions
(a) For each of the above items indicate:
1. The type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense).
2. The account relationship (expense/asset, liability/revenue, etc.).
3. The status of account balances before adjustment (understatement or overstatement).
4. The adjusting entry.
(b) Assume net income before the adjustments listed above was $12,500. What is the adjusted net income?
Prepare your answer in the tabular form presented below.

---

Definitions:

Warehouse Activity

Refers to all the movements, processes, and operations involved in the storage, handling, and distribution of goods within a warehouse.

Warehouse Activities

The various tasks involved in the operation of a warehouse, including inventory management, shipping, receiving, and storage.

Basic Functions

The fundamental operations or activities that are necessary for an organization, system, or process to run effectively.

Receiving

Refers to the process of accepting goods, documents, or other items.