Adjusting Entries-Effect on Elements of Financial Statements

question 17

Essay

Adjusting entries-effect on elements of financial statements
Whoop-It-Up, Inc. prepares monthly financial statements. On March 31, the company's accountant made adjusting entries to record:
(A) Depreciation for the month of March.
(B) Amount owed to Whoop-It-Up, Inc for March from the concessionaire operating a juice bar in the facility. The amount due will be remitted to Whoop-It-Up, Inc during the first week in April.
(C) Cost of supplies used in March. (When purchased, the cost of supplies is debited to an asset account.)
(D) Earning of a portion of annual membership fees which had been collected in advance. (When customers purchase annual memberships, an Unearned Revenue account is credited.)
(E) Accrued interest for March owed on a bank loan obtained March 1. No interest expense has yet been recorded.
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 owner's 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:

Financial Crisis

A situation in which the value of financial institutions or assets drops rapidly, leading to a loss of confidence among investors, lenders, and the public.

U.S. Dollars

The official currency of the United States, widely used as a standard of exchange in international markets and as a reserve currency globally.

Euro

The official currency of 19 out of the 27 European Union countries, which forms one of the largest economic and trading blocks in the world.

Adopted

The action of legally taking another's child and raising it as one's own or the acceptance and implementation of a measure, idea, or proposal.