Answer:
After the adjustments stockholders’ equity on 7/31 will be $20,184.
Explanation:
<u>Journal Entries to Show the adjustments are as follows :</u>
a.
Utility Expenses $568 (debit)
Accounts Payable $568 (credit)
b.
Wages Expense $1,648 (debit)
Wages Payable $1,648 (credit)
c.
Loan Receivable $2,400 (debit)
Interest Income $2,400 (credit)
<u>To Determine Effect on Equity use the Accounting Equation : </u><u>Assets = Equity + Liability.</u>
Therefore, Equity = Assets - Liability
Effect on Assets = $70,000 + $2,400 = $72,400
Effect on Liabilities = $50,000 + $568 + $1,648 = ($52,216)
Effect on Equity (Total) = $20,184
Conclusion :
Therefore, After the adjustments stockholders’ equity on 7/31 will be $20,184.
