Question

Paula Judge owns Judge Creative Designs. The trial balance of the firm for January 31, 2019, the first month of operations, is shown below. End-of-the-month adjustments must account for the following items: a. Supples were purchased on January 1, 2019, Inventory of supplies on January 31, 2019, is $1,300. b. The prepaid advertising contract was signed on January 1, 2019, and covers a four-month period. C. Rent of $1.800 expired during the month. d. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of 10 years with no salvage value. Required: 1. Complete the worksheet for the month 2. Prepare an income statement, statement of owner's equity, and balance sheet. No additional Investments were made by the owner during the month. 3. Journalize and post the adjusting entries Analyze If the adjusting entries had not been made for the month, would net income be overstated or understated? X Answer is not complete. Complete this question by entering your answers in the tabs below. Real Ledgers Analyze Income Statement Debit Credit Req1 Reg 2 Inc Reg 2 Reg 2 Bal Req3 Reg 3 Stmt Stmt of Sheet Gen Ledgers Complete the worksheet for the month. JUDGE CREATIVE DESIGNS Worksheet Month Ended January 31, 2019 Trial Balance Adjustments Adjusted na Account Name Debit Credit Debit Credit Debit Credit Cash S 35,900 S 35,900 Accounts Receivable 13,000 13,000 Supplies 8,5501 7,250 1,300 Prepaid Advertising 10.000 2,500 7,500 Prepaid Rent 21,600 1,800 19,800 Equipment 26,400 26,400 Accumulated Depreciation 220 220 -Equipment Accounts Payable 15,950 15,9507 Paula Judge, Capital 60,400 60,400 Paula Judge, Drawing 7,400 7,400 Fees Income 58,200 58,2007 Advertising Expense se 2,500 Depreciation Expense- 2209 Equipment Rent Expense 1,800 1,800 Salaries Expense 10.100 10,100 Supplies Expense 7250 Utilities Expense 1,600 1,600 Balance Sheet Debit Credit IS 35.900 13,000 1,300 7,500 19,800 26,400 220 15,950 60,4007 17.400 V 58.2007 2,500 2200 7.250 1,800 10.1007 7,2507 1,600
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Answer 1

Step 1 $58,200 Judge Creative Designs Income Statement For the year ended January 31, 2019 Fees Income Less: Expenses Advertising Expense $2,500 Depreciataion Expense-Equipment $220 Rent Expense $1,800 Salaries Expense $10,100 Supplies Expense $7,250 Utilities Expense $1,600 Total Expense Net Income Step 3 Judge Creative Designs Balance Sheet January 31, 2019 Assets Cash Accounts Receivable Supplies Prepaid Advertising Prepaid Rent Equipment Less: Accumulated Depreciation - Equipment Total Assets $35,900 $13,000 $1,300 $7,500 $19,800 $26,400 $220 $26,180 $1,03,680 $23,470 $34,730 Step 2 Liabilities and Owners' Equity Liabilities Accounts Payable $15,950 Judge Creative Designs Statement of Owners' Equity For the year ended January 31, 2019 Beginning Capital Balance Add: Net Income $34,730 Less: Drawings $7,400 Ending Capital Balance $60,400 Owners' Equity Total Liabilities and Owners' Equity $87,730 $1,03,680 $27,330 $87,730