Question

Required information

On January 1, Year 1, the general ledger of a company includes the following account balances:

Accounts	Debit				Credit
Cash	$	24,400
Accounts Receivable		5,800
Supplies		3,700
Land		56,000
Accounts Payable					$	3,800
Common Stock						71,000
Retained Earnings						15,100
Totals	$	89,900			$	89,900

During Year 1, the following transactions occur:

January		2		Purchase rental space for one year in advance, $7,800 ($650/month).
January		9		Purchase additional supplies on account, $4,100.
January		13		Provide services to customers on account, $26,100.
January		17		Receive cash in advance from customers for services to be provided in the future, $4,300.
January		20		Pay cash for salaries, $12,100.
January		22		Receive cash on accounts receivable, $24,700.
January		29		Pay cash on accounts payable, $4,600.

3. Prepare an adjusted trial balance as of January 31, Year 1.

Answer 1

Adjusted trial balance
Item	Debit	credit
Cash	28900
Accounts receivable	7200
Prepaid rent	7150
Supplies	3400
Land	56000
Accounts payable		3300
Salaries payable		5380
unearned service revenue		650
Common stock		71000
Retained earnings		15100
Service revenue		29750
Rent expense	650
salaries expense	17480
supplies expense	4400
total	125180	125180

working

Date	Accounts	debit	credit
Jan-02	Prepaid rent	7800
	cash		7800
Jan-09	Supplies	4100
	Accounts payable		4100
Jan-13	Accounts receivable	26100
	sales revenue		26100
Jan-17	Cash	4300
	Unearned revenue		4300
Jan-20	Salaries expenses	12100
	cash		12100
Jan-22	Cash	24700
	Accounts receivable		24700
Jan-29	Accounts payable	4600
	cash		4600
Jan-31	Rent expense	650
	prepaid rent		650
Jan-31	Supplies expense	4400
	supplies		4400
Jan-31	Unearned revenue	3650
	service revenue		3650
Jan-31	Salaries expense	5380
	salaries payable		5380

Income Statement
Service revenue	29750
Expenses
Rent expense	650
salaries expense	17480
supplies expense	4400
total expense	22530
Net income	7220