Prepare Year-End Adjustments for the Following Transactions

question 141

Essay

Prepare year-end adjustments for the following transactions. Omit explanations.
1. Accrued interest on notes receivable is $30.
2. $1,000 of unearned service revenue has been recognized.
3. Three years' rent, totaling $45,000, was paid in advance at the beginning of the year.
4. Services totaling $2,900 had been performed but not yet billed at the end of the year.
5. Depreciation on equipment totaled $6,500 for the year.
6. Supplies purchased totaled $850. By year end, only $250 of supplies remained.
7. Salaries owed to employees at the end of the year total $960

---

Definitions:

Earnings Quality

A measure of the reliability of a company’s earnings as an indicator of its financial health and performance.

Accounting Methods

Systems used by a company to keep track of its financial transactions and to prepare financial statements, such as cash basis or accrual basis accounting.

Bad News Earnings Surprises

Occur when a company reports lower earnings than market analysts' expectations, often leading to a negative reaction in the stock market.

Stock Returns

The gain or loss on a stock investment, typically expressed as a percentage of the investment's initial cost.