Question

On July 31, 2019, after one month of operation, the general ledger of Michael Domenici, Consultant, contained the accounts and balances given below.

ACCOUNTS AND BALANCES
Cash	$	25,360		Dr.
Accounts Receivable		1,410		Dr.
Supplies		930		Dr.
Prepaid Rent		10,050		Dr.
Prepaid Insurance		2,040		Dr.
Prepaid Interest		388		Dr.
Furniture		14,397		Dr.
Accumulated Depreciation—Furniture
Equipment		6,995		Dr.
Accumulated Depreciation—Equipment
Notes Payable		17,400		Cr.
Accounts Payable		5,200		Cr.
Interest Payable
Unearned Consulting Fees		5,640		Cr.
Michael Domenici, Capital		31,680		Cr.
Michael Domenici, Drawing		2,700		Dr.
Consulting Fees		8,700		Cr.
Salaries Expense		3,900		Dr.
Utilities Expense		255		Dr.
Telephone Expense		195		Dr.
Supplies Expense
Rent Expense
Insurance Expense
Depreciation Expense—Furniture
Depreciation Expense—Equipment
Interest Expense

ADJUSTMENTS

1. On July 31, an inventory of the supplies showed that items costing $615 were on hand.
2. On July 1, the firm paid $10,050 in advance for six months of rent.
3. On July 1, the firm purchased a one-year insurance policy for $2,040.
4. On July 1, the firm paid $388 interest in advance on a four-month note that it issued to the bank.
5. On July 1, the firm purchased office furniture for $14,397. The furniture is expected to have a useful life of eight years and a salvage value of $1,725.
6. On July 1, the firm purchased office equipment for $6,995. The equipment is expected to have a useful life of five years and a salvage value of $1,775.
7. On July 1, the firm issued a three-month, 6 percent note for $9,200.
8. On July 1, the firm received a consulting fee of $5,640 in advance for a one-year period.

Required:

1. Prepare a partial worksheet with the following sections: Trial Balance, Adjustments, and Adjusted Trial Balance. Use the data about the firm’s accounts and balances to complete the Trial Balance section.
2. Enter the adjustments described above in the Adjustments section.
3. Complete the Adjusted Trial Balance section.

Analyze:
By what total amount were the expense accounts of the business adjusted?

Answer 1