Sam Nix owns Nix Estate Planning and Investments. The trial balance of the firm for June 30, 2016, the first month of operations, is shown below.

INSTRUCTIONS
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. Use 3 for the journal page number. Use the account numbers provided in Problem 5.4A.
End-of-month adjustments must account for the following:
a. The supplies were purchased on June 1, 2016; inventory of supplies on June 30, 2016, showed a value of $6,000.
b. The prepaid advertising contract was signed on June 1, 2016, and covers a four-month period.
c. Rent of $6,000 expired during the month.
d. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of five years with no salvage value.
Analyze: Why are the costs that reduce the value of equipment not directly posted to the asset accountEquipment?

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NxEtate lanning and Investments Worksheet (Partial) Month Ended June 30, 2016 TRIAL BALANCE ADJUSTMENTS ACCOUNT NAME DEBIT CREDIT DEEIT CREDIT Cash Accounts Receivable Supplies Prepaid Advertising Prepaid Remt Equipment Accumulated Depreciation Equipment Accounts Payable Sam Nix, Capital Sam Nix, Drawing 39 40 0 00 12 2 00 00 15 2 00 00 28 800 00 72 0 00 00 96 000 00 21 6 0 0 00 120 20000 800000 Fees Income Advertising Expense Depreciation ExpenseEquipment Rent Expense Salanes Expense Supplies Expense Utilities Expense otals 147 600 00 15 2 0 00 2 600 00 289 4 0 0 00 289 40 0 00 CJ's Accounting Services Worksheet Month Ended December 31, 2016 TRIAL BALANCE ADJUSTMENTS ACCOUNT NAME DEBIT CREDIT DEEIT CREDIT 16 9 5 0 0o 220000 1 500 00 4 000 00 18 00 0 00 Cash Accounts Receivoble Supplies Prepaid Advertising Fixtures Accumulated Depreciation Fixtures Accounts Payable Charlene Jordan, Capital Charlene Jordan, Drawing Fees Income Advertising Expense Depreciation Expense Fixtures Rent Expense Salares Expense Supplies Expense (a)600 0 (b) o o o0 (c) 30o 0 500 00 30 0 00 00 3 000 00 31 3 3 0 0o (c)3 0 0 00 3 50 0 00 186|00|00 tilities Expense Totals Net Income 1 08 0 00 68|8|3|0100 | б8 | 8|3101001| 1|70| 0|001 11710101001