Question

Question: Following are two income statements for Alexis Co. for the year ended December 31. The left number

column is prepared before any adjusting entries are recorded, and the right column includes the effects of

adjusting entries. The middle column shows a blank space for each income statement effect of the eight

adjusting entriesathrough g(the balance sheet part of the entries is not shown here). Analyze the statements

and prepare the eight adjusting entries athrough gthat likely were recorded. Note:Answer for ahas

two entries (i) of the \(7,000 adjustment for Fees Earned, 30% (or \)2,100) has been earned but not billed,

and (ii) the other 70% (or \(4,900) has been earned by performing services that were paid for in advance.

ALEXISUnadjusted Adjustments Adjusted

Revenues

Fees earned . \)18,000 a. \(25,000

Commissions earned . 36,500 36,500

Total revenues 54,500 61,500

Expenses

Depreciation expense—Computers 0 b.  1,600

Depreciation expense—Office furniture . 0 c.1,850

Salaries expense 13,500 d. 15,750

Insurance expense . 0 e.1,400

Rent expense 3,800 3,800

Office supplies expense 0 f. 580

Advertising expense 2,500 2,500

Utilities expense . 1,245 g. 1,335

Total expenses . 21,045 28,815

Net income \)33,455 $32,685

Short answer

Answer:

Journal entrues in the Alexi co. shown in the step 2.

Step-by-step solution

Step-by-Step AnswerStep 1: Defiintion of accounts receivable

It is the amount that is earned but due for payment.

Required adjustment entries

	Journal entries
Date	Particular	Debit	Credit
A1.	Account Receivable	$2,100
	Fees earned		$2,100
	(Adjustment entry for fees earned)
A2.	Unearned Revenue	$4,900
	Fees Earned		$4,900
	(Adjustment entry for unearned fees)
b.	Depreciation Expense- Computer	$1,600
	Accumulated Depreciation		$1,6600
	(Adjustment entry for depreciation)
c.	Depreciation Expense- Furniture	$1,850
	Accumulated Depreciation		$1,850
	(Adjustment entry of furniture depreciation )
d.	Salaries Expenses	$2,250
	Salaries Payable		$2,250
	(Adjustment entry for salary payable)
e.	Insurance Expense	$1,400
	Insurance Payable		$1,400
	(Adjustment entry of insurance expense)
f.	Office Supplies Expenses	$580
	Office Supplies		$580
	(Adjustment entry for office supplies expenses)
g.	Utilities Expenses	$90
	Utilities Expenses Payable		$90
	(Adjustment entry for the utilities expenses)