Answer:
Crazy Mountain Outfitters Co.
a. Income Statement before Adjusting Entries:
Fees Earned 484,400
Wages Expense 112,380
Rent Expense 85,740
Utilities Expense 61,520
Miscellaneous Expense 9,690 269,330
Net Income 215,070
b. Income Statement after adjustments:
Fees Earned 510,000
Wages Expense 113,930
Rent Expense 85,740
Utilities Expense 61,520
Supplies Expense 12,220
Depreciation expense 12,110
Miscellaneous Expense 9,690 295,210
Net Income 214,790
c. The effect of the adjusting entries on Retained Earnings:
Retained earnings per unadjusted trial balance $225,000
Net income after adjusting entries 214,790
Ending Retained earnings after adjusting entries $439,790
Ending Retained earnings before adjusting entries 440,070 (225,000 + 215,070)
Difference in the Retained earnings = $280
Explanation:
a) Data and Calculations:
Crazy Mountain Outfitters Co.
Unadjusted Trial Balance April 30, 20Y5
Debit Credit
Cash 12,110
Accounts Receivable 80,410
Supplies 19,380
Equipment 407,380
Accounts Payable 18,890
Unearned Fees 21,310
Common Stock 55,000
Retained Earnings 225,000
Dividends 15,990
Fees Earned 484,400
Wages Expense 112,380
Rent Expense 85,740
Utilities Expense 61,520
Miscellaneous Expense 9,690
Totals 804,600 804,600
b) Analysis:
1. Supplies Expense $12,220 Supplies $12,220 ($19,380 - $7,160)
2. Accounts receivable $8,770 Fees earned $8,770
3. Depreciation expense $12,110 Accumulated Depreciation $12,110
4. Wages Expense $1,550 Wages Payable $1,550
5. Unearned Fees $16,830 Fees earned $16,830
After Adjusting Entries:
Fees Earned = 510,000 (484,400 + 8,770 + 16,830)
Wages Expense = 113,930 (112,380 + 1,550)
Rent Expense 85,740
Utilities Expense 61,520
Supplies Expense 12,220 (0 + 12,220)
Depreciation expense 12,110 (0 + 12,110)
Miscellaneous Expense 9,690 295,210
