Answer & Explanation
A) Wolfe-Bache Corporation
Expenses will be understated thus, net income overstated.
In the balance sheet this makes assets Office supplies be overstated as it wasn't adjusted and retained earnings as well.
Prior Period Adjustment 1,800 debit
Supplies 1,800 credit
--to adjust supplies and recognize prior period results--
B) Midwest Importers
rent revenue overstated thus, income statement overstated.
in the balance sheet Retained Earnings will be overstated as well.
While liabilities for the paid in advance rent will not exit thus, understated
Prior Period Adjustment 90,000 debit
unearned revenue 90,000 credit
--to adjust for unearned revenue on previous periods--
C) Dinkins-Lowery Corporation
interest revenue will be understated thus, income statement as well.
In the balance sheet the note receivable net balance will be understated and so the equity as retained earnings is understated.
Prior period adjusment 8,000 debit
interest receivable 8,000 credit
--to adjust for missing year-end adjusting entry--
