Question

The trial balance of Chelsea Elliott, marketing services provider, at 30 June 2015 was as follows:

Chelsea Elliott, Marketing Services Unadjusted trial balance as at 30 June 2015
Account		Debit		Credit
Cash at bank		$7,470
Accounts receivable		20,830
GST receivable		2,500
Prepaid rent		2,020
Prepaid insurance		2,620
Office supplies		3,860
Office equipment		11,710
Accumulated depreciation ― office equipment				$2,370
Accounts payable				2,690
Unearned fees				1,060
Loan payable ― due 2015				8,830
GST payable				7,740
C Elliott, capital				15,940
C Elliott, drawings		49,920
Fees revenue				132,860
Salaries expense		54,910
Telephone expense		5,860
Rent expense		9,790
		$171,490		$171,490

adjusting entries.

1.		Interest expense of $500 has accrued on the loan payable.
2.		A physical count of office supplies on 30 June shows $540 of unused supplies on hand.
3.		Depreciation of the office equipment this year is estimated to be $980.
4.		Half the amount in the unearned fees account had been earned by the end of the year.
5.		The amount in the prepaid rent account covers this June and the next 2 months.
6.		Of prepaid insurance, 70% expired this period.
7.		Salaries expense accrued for the last 4 days in June amounts to $1,590.
8.		The telephone expense for June of $640 has not been recorded or paid. No tax invoice has been issued.

Prepare an adjusted trial balance, an income statement and a balance sheet.

Answer 1

Chelsea Elliott, Marketing Services
Unadjusted trial balance
as at 30 June 2015				Adjusting entries		Adjusted Trial Balance
Account	Debit	Credit	Trans	Debit	Credit	Debit	Credit
Cash at bank	7470					7470
Accounts receivable	20,830					20830
GST receivable	2,500					2500
Prepaid rent	2,020		5		673	1347
Prepaid insurance	2,620		6		1834	786
Office supplies	3,860		2		3,320	540
Office equipment	11,710					11710
Accumulated depreciation ― office equipment		2370	3		980		3350
Accounts payable		2,690					2690
Salaries Payable			7		1590		1590
Utilities payable			8		640		640
Unearned fees		1,060	4	530			530
Loan payable ― due 2015		8,830					8830
GST payable		7,740					7740
Interest Payable			1		500		500
C Elliott, capital		15,940					15940
C Elliott, drawings	49,920					49920
Fees revenue		1,32,860	4		530		133390
Salaries expense	54,910		7	1590		56500
Telephone expense	5,860		8	640		6500
Rent expense	9,790		5	673		10463
Office Supplies expenses			2	3,320		3320
Interest expenses			1	500		500
Depreciation expenses			3	980		980
Insurance expenses			6	1834		1834
Total	171490	171490		10067	10067	175200	175200

Income Statement
Fees revenue		133390
Less: Operating expenses
Salaries expense	56500
Telephone expense	6500
Rent expense	10463
Office Supplies expenses	3320
Interest expenses	500
Depreciation expenses	980
Insurance expenses	1834	80097
Net Income		53293
Balance Sheet
Assets
Current assets
Cash at bank	7470
Accounts receivable	20830
GST receivable	2500
Prepaid rent	1347
Prepaid insurance	786
Office supplies	540
Total current assets		33473
Office equipment	11710
Accumulated depreciation ― office equipment	3350	8360
Total assets		41833
Liabilities & Owner equity
Liabilities
Accounts payable	2690
Salaries Payable	1590
Utilities payable	640
Unearned fees	530
Loan payable ― due 2015	8830
GST payable	7740
Interest Payable	500
Total Liabilities		22520
C Elliott, capital		19313
Total Liabilities & Owner equity		41833