Simone Jacobs opened a small tax-preparation service. At the end of its second year of operation, Jacobs Financial Advisors Service had the following trial balance.

The following information is also available:
a. Office supplies on hand, December 31, 2014, $319
b. Insurance still unexpired, $180
c. Estimated depreciation of office equipment, $870
d. Telephone expense for December, $182; the bill was received but not recorded.
e. The services for all unearned tax fees had been performed by the end of the year.

REQUIRED
1. Open T accounts for the accounts in the trial balance plus the following: Office Supplies Expense; Insurance Expense; and Depreciation Expense—Office Equipment. Record the balances shown in the trial balance.
2. Determine the adjusting entries and post them directly to the T accounts.
3. Prepare an adjusted trial balance, an income statement, a statement of owner’s equity, and a balance sheet. The owner made no investments during the period.
4. Why is it not necessary to show the effects of the above transactions on the statement of cashflows?

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Jacobs Financial Advisors Service Trial Balance December 31, 2014 Cash Accounts Receivable Prepaid Insurance Office Supplies Office Equipment Accumulated Depreciation-Office Equipment Accounts Payable Unearned Tax Fees S. Jacobs, Capital S. Jacobs, Withdrawals Tax Fees Revenue Office Salaries Expense Advertising Expense Rent Expense Telephone Expense 11,265 2,191 520 682 7,980 790 437 519 5,474 7,500 36,926 9,700 650 3,200 458 44,146 44,146