Fox Enterprises is owned by Edmund Fox and has a January 31 fiscal year end. The company prepares adjusting entries on an annual basis. The following trial balance was prepared before adjustments:

Additional information:
1. A one-year insurance policy was purchased on July 1, 2023.
2. A count of supplies on January 31, 2024, shows $920 of supplies on hand.
3. The equipment has an estimated useful life of five years.
4. An analysis of the Unearned Revenue account shows that $5,230 of the services had been provided by January 31, 2024.
5. The eight-month, 6% note was issued on November 1, 2023. Interest and principal are due on the maturity date.
6. Salaries accrued to January 31, 2024, were $1,315.
7. On January 31, 2024, the company had provided services but not billed or recorded service revenue of $2,675.
8. The telephone bill for January 2024 was $170. It has not been recorded or paid. (Use the Accounts Payable account.)

Instructions
a. Prepare T accounts and enter the unadjusted trial balance amounts.
b. Prepare and post the adjusting entries on January 31.
c. Prepare an adjusted trial balance at January 31.
d. Prepare an income statement and a statement of owner’s equity for the year ended January 31, and a balance sheet as at January 31, 2024.

Taking It Further

Comment on the company’s results of operations and its financial position. In your analysis, refer to specific items in the financial statements.

Transcribed Image Text:

Cash Accounts receivable Prepaid insurance Supplies Equipment Accumulated depreciation-equipment Accounts payable Unearned revenue FOX ENTERPRISES Trial Balance January 31, 2024 Notes payable E. Fox, capital E. Fox, drawings Service revenue Rent expense Salaries expense Telephone expense Debit $ 4,970 14,540 3,960 6,580 32,350 119,000 20,750 66,950 2,900 $272,000 Credit $ 12,940 7,760 7,480 11,000 18,320 214,500 $272,000