Adjusting Entries-Effect on Elements of Financial Statements

question 16

Essay

Adjusting entries-effect on elements of financial statements
Galaxy Entertainment prepares monthly financial statements. On July 31, the accountant made adjusting entries to record:
(A.) Depreciation for the month of July.
(B.) The portion of prepaid rent for outdoor stage and seating which had expired in July.
(C.) Earning of ticket revenue for July which had been subscribed in advance. (When patrons purchase the Summer Jazz Series tickets in advance, the accountant credits Unearned Ticket Revenue.)
(D.) Amount owed to Universal from the caterer who sold food and beverages during the July performances. The amount due will be paid to the company on August 8.
(E.) Amount owed to the musicians which had accrued since the last pay day in July.
Indicate the effect of each of these adjusting entries on the major elements of the company's financial statements-that is, on revenue, expenses, net income, assets, liabilities, and owners' equity. Organize your answer in tabular form, using the column headings shown below and the symbols + for increase, - for decrease, and NE for no effect.

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Definitions:

Nuclear Reactor

A device used to initiate and control a sustained nuclear chain reaction, primarily for the generation of electricity.

Net Useful Energy

The amount of energy available for use after subtracting the energy lost in conversion, transmission, and distribution processes.

Fissionable Fraction

The portion of a nuclear fuel that can undergo fission, the process by which atomic nuclei split to release energy.

Uranium-235

A naturally occurring isotope of uranium with the ability to undergo fission, making it a critical component for nuclear reactors and weapons.