Consider the unadjusted trial balance of Royal, Inc., at December 31, 2020, and the related month-end adjustment data.

Adjustment data at December 31, 2020, include the following:

a. Accrued service revenue at December 31, $3,850.
b. Prepaid rent expired during the month. The unadjusted prepaid balance of $3,300 relates to the period December 1, 2020, through February 28, 2021.
c. Supplies used during December, $2,120.
d. Depreciation on furniture for the month. The furniture’s expected useful life is five years.
e. Accrued salary expense at December 31 for Monday, Tuesday, and Wednesday. The five-day weekly payroll is $14,000 and will be paid on Friday.

Requirements
1. Prepare the adjusted trial balance of Royal, Inc., at December 31, 2020. Key each adjusting entry by letter.
2. Prepare the single-step income statement, the statement of retained earnings, and the classified balance sheet. Draw arrows linking the three statements.

Transcribed Image Text:

A1 Royal, Inc. Trial Balance Worksheet December 31, 2020 Trial Balance Debit 9,400 1,900 3,300 2,600 72,000 Adjustments Credit Debit Adjusted Trial Balance Credit Debit Credit 3 Account 4 Cash 5 Accounts receivable 6 Prepaid rent 7 Supplies 8 Furniture 9 Accumulated depreciation-furniture 10 Accounts payable 11 Salary payable 12 Common stock 13 Retained earnings 14 Dividends 15 Service revenue 16 Salary expense 17 Rent expense 18 Utilities expense 19 Depreciation expense-furniture 20 Supplies expense 21 Total 3,100 3,400 12,000 58,620 4,200 19,300 2,500 520 96,420 96,420 22