The Unadjusted Trial Balance and the Adjustment Data for Harris

question 135

Essay

The unadjusted trial balance and the adjustment data for Harris Training Institute are given below along with adjusting entry information. What is the impact of the adjusting entries on the balance sheet? Show calculation for total assets, total liabilities, and owner's equity without the adjustments; show calculation for total assets, total liabilities, and owner's equity with the adjustments. Which one gives the most accurate presentation of the balance sheet?
Additional information items:
a. The Prepaid Insurance account consists of a payment for a 1 year policy. An analysis of the insurance invoice indicates that one half of the policy has expired by the end of the December 31 year-end.
b. A cash payment for space sublet for 8 months was received on July 1 and was credited to Unearned Rent.
c. Accrued interest expense on the note payable of $1,000 has been incurred but not paid.

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Definitions:

Contingency Management

A behavior modification technique that incentivizes or rewards desired behaviors, while discouraging undesired ones, typically used in addiction treatment.

Drug Use

The consumption of substances that can alter perception, mood, or consciousness, often classified as legal (e.g., prescription medications) or illegal (e.g., heroin).

Reinforcers

In behavioral psychology, stimuli which, when they follow a behavior, increase the likelihood that the behavior will occur again.

Treatment Results

The outcomes or effects observed following the implementation of a therapeutic intervention or medical treatment.