| Course | AC112 Accounting Fundamentals for Management |
|---|---|
| Unit | Unit 4 |
| Paper type | Adjusting entries set |
| Length | About 740 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Accounting |
| Updated | October 2026 |
Free sample paper for AC112 Unit 4
Six Facts the Books Had Not Caught: A Unit 4 Adjusting Entries Set for a Dog Grooming Salon at Month End
[Student Name]
Purdue University Global
AC112: Accounting Fundamentals for Management
Unit 4 Adjusting Entries Set
[Instructor Name]
[Date]
The grooming salon and its month-end facts are composite; the textbook, conceptual framework and research on accruals cited are real.
The Problem at Month End
Under the accrual basis, a grooming is revenue in the month the dog is bathed, and a cost belongs to the month the salon uses it up, whatever the bank account says, so some events at month end have no document yet (Franklin et al., 2019). Each adjustment below names the fact that triggered it, shows the calculation, gives the entry and says which figure would have been wrong without it.
Adjustment 1: Insurance Used
Fact: the twelve-month policy bought for $2,400 has one month expired. Calculation: $2,400 divided by 12 months equals $200. Entry: Insurance Expense, debit $200; Prepaid Insurance, credit $200. Without it: expenses understated by $200, and the balance sheet claims a full year of coverage still unused.
Adjustment 2: Supplies Used
Fact: a count on March 31 finds $650 of shampoo, blades and towels on hand; the ledger shows $1,500. Calculation: $1,500 minus $650 equals $850 used. Entry: Supplies Expense, debit $850; Supplies, credit $850. Without it: the largest single understatement in the set, profit too high by $850, and an asset that is mostly gone.
Adjustment 3: Equipment Wear
Fact: the $18,000 of tubs, tables and dryers has a five-year working life at the salon, and Renata expects no resale value when it is retired. Calculation: $18,000 divided by 60 months equals $300 per month. Entry: Depreciation Expense, debit $300; Accumulated Depreciation, Equipment, credit $300. Without it: profit overstated by $300 every month the equipment is used.
Adjustment 4: Wages Earned but Not Paid
Fact: groomers worked March 29 through 31 and will be paid on April 7; their pay for those days totals $540. Entry: Wages Expense, debit $540; Wages Payable, credit $540. Without it: March looks cheaper than it was, and April carries a cost March created.
Adjustment 5: Grooming Done but Not Billed
Fact: dogs boarding at the kennel were groomed on March 30 and 31; the $460 invoice goes out April 2. Entry: Accounts Receivable, debit $460; Grooming Revenue, credit $460. Without it: revenue understated by $460, the one adjustment in the set that raises profit.
Adjustment 6: Interest Owed on the Note
Fact: Renata's $12,000 note to the equipment supplier charges interest at 6 percent a year, with the first payment due April 30. Calculation: $12,000 times 6 percent, divided by 12 months, equals $60. Entry: Interest Expense, debit $60; Interest Payable, credit $60. Without it: the cost of borrowing for March is missing from March.
Profit Before and After
1. Net income before adjustments: revenue $10,400 minus wages $3,900 and rent $2,200 equals $4,300.
2. Expense adjustments: $200 plus $850 plus $300 plus $540 plus $60 equals $1,950.
3. Revenue adjustment: plus $460.
4. Net income after adjustments: $4,300 minus $1,950 plus $460 equals $2,810.
5. Difference: $1,490, or about 35 percent of the unadjusted figure.
Without the six entries Renata would have read March as a $4,300 month, more than half again what the salon actually earned, and could have planned April spending around a profit that did not exist.
What the Pattern Shows
Five of the six adjustments lowered profit, which is typical of a business that pays for things in advance and uses them gradually. None of the entries involves cash, because anything involving cash would already have a receipt or a bank record. Research on accruals has shown that adjusted earnings describe a firm's performance over a period better than its cash flows do, precisely because they move costs and revenues into the period that caused them (Dechow, 1994). The adjustments also make the statements more faithful to what happened, which is the quality users depend on (Financial Accounting Standards Board, 2018).
Note for the Owner
Renata, the most useful number here is the $850 of supplies. It suggests you used more than half of a month's purchase in a month that was not yet fully booked. As appointments grow, supplies will be one of the first costs to watch, and a monthly count is the only way the books will know what was used.
References
Dechow, P. M. (1994). Accounting earnings and cash flows as measures of firm performance: The role of accounting accruals. Journal of Accounting and Economics, 18(1), 3-42. https://doi.org/10.1016/0165-4101(94)90016-7
Financial Accounting Standards Board. (2018). Conceptual framework for financial reporting: Chapter 1, The objective of general purpose financial reporting, and Chapter 3, Qualitative characteristics of useful financial information (Statement of Financial Accounting Concepts No. 8, as amended). https://www.fasb.org
Franklin, M., Graybeal, P., & Cooper, D. (2019). Principles of accounting, volume 1: Financial accounting. OpenStax. https://openstax.org/details/books/principles-financial-accounting
What the AC112 Unit 4 assignment asks for
The fourth AC112 unit supplies a trial balance and a list of end-of-period facts, and asks which items need adjusting. For each fact, decide whether it is an accrual, where the event happened but no cash has moved, or a deferral, where cash moved earlier and the item is now being used or earned. Show the calculation in one or two lines, then the two-line entry. Most AC112 rubrics also ask what would have been misstated without the entry, so add a line for a manager. Remember that adjusting entries never involve cash. After the entries, compare net income before and after adjustment. A short concluding note on what the pattern means for the business is often expected. Expect two to three pages, with textbook citations in APA 7.
How the AC 112 Unit 4 example is put together
The sample opens by explaining why month-end facts lack documents under the accrual basis. Six blocks follow, each headed by its fact. Insurance used is one-twelfth of $2,400. Supplies used come from a shelf count of $650 against a ledger of $1,500. Depreciation spreads $18,000 over sixty months. Wages for March 29 to 31 are accrued at $540. Unbilled kennel grooming adds $460 of revenue, the one adjustment that raises profit. Interest on the $12,000 note is one month at 6 percent. A numbered list moves net income from $4,300 to $2,810, a $1,490 difference, and the highlighted sentence states what the owner would have believed without the entries. A note recommends a monthly supplies count.
AC112 Unit 4 rubric: what earns full points
Adjusting entry sets are graded on correct identification of what needs adjusting, correct amounts and correct accounts on each side of the entry. Calculations shown in full earn partial credit even when a figure slips. Entries that touch cash lose points, since adjustments never do. In AC112, the line explaining each entry's effect on the statements is frequently a separate scoring element. The before-and-after comparison of net income shows the student understands why the adjustments matter. Classifying each item as an accrual or deferral can earn credit when the prompt asks for it. A concluding note for the owner reflects the course's management focus. Neat blocks and consistent labels help graders, and APA 7 citations complete the marks.
Common AC112 Unit 4 mistakes, and how to avoid them
The most frequent adjusting error is recording supplies used as the amount on hand rather than the difference. Others depreciate equipment for a full year in a single month. Accrued wages are sometimes credited to Cash, which turns an adjustment into a payment. Unbilled revenue gets missed because nothing has been invoiced. Interest is left out when the first loan payment falls next month. Students often skip the effect lines, losing points the rubric reserves for interpretation. If your trial balance and month-end facts are ready but the entries will not settle, a writer can work your set block by block from your own problem.
Get an AC112 Unit 4 example written to your instructions
Your AC112 section's Unit 4 trial balance and its list of month-end facts are all the adjustments need, together with the instructions and rubric. A worked set comes back in 24-48h, each entry carrying its arithmetic and manager's note, and the first custom sample carries no fee at all. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More AC112 papers and BS in Accounting samples
- AC112 Unit 1: Why Managers Read Entries Post
- AC112 Unit 2: Transaction Analysis Exercise
- AC112 Unit 3: Trial Balance Problem and Note
- AC112 Unit 5: Financial Statement Preparation
- AC112 Unit 6: Cash Flow Discussion
- AC112 Unit 7: Ratio Interpretation Memo
- AC112 Unit 8: Seminar Reflection
- AC112 Unit 9: Budget Schedule
- AC112 Unit 10: Management Report
AC112 Unit 4 questions, answered
How do I tell an accrual from a deferral in this set?
The test is whether cash has already moved. If nothing has been paid or received yet but the work or the cost has happened, the adjustment is an accrual. If cash moved earlier and part of what it bought has now been used or earned, it is a deferral. AC112 sets usually mix both, and the sample groups them so the pattern shows.
Why can't an adjusting entry include cash?
Because any event involving cash would already have a source document and would have been recorded when it happened. Adjustments exist to catch what the ordinary flow of paperwork missed: time passing, supplies being consumed, work done without an invoice. An adjustment that debits or credits cash almost always means a regular transaction was misclassified as one.
Is the manager's note required if my prompt only asks for entries?
The rubric is a better guide than the prompt here; AC112 rubrics often reserve points for explaining effects even when the instructions list only the entries. If the rubric truly has no such row, the note can shrink to a phrase per entry. Dropping it entirely is the riskier choice in a course designed around interpretation.
Where can I find a free AC112 Unit 4 sample paper?
A complete AC112 Unit 4 adjusting entries set is on this page, recording six month-end facts for a dog grooming salon with calculations, entries and effect lines, moving net income from $4,300 to $2,810.
Which adjustment raises profit in the AC112 Unit 4 sample?
Only the unbilled grooming does. Dogs boarding at a kennel were groomed on the last two days of March, and recording that $460 of revenue increases net income while the other five entries reduce it.