The trial balance for Best Advisors Service, Inc., on December 31 follows.

The following information is also available: 

a. Ending inventory of office supplies, $300. 

b. Prepaid rent expired, $610. 

c. Depreciation of office equipment for the period, $526. 

d. Accrued interest expense at the end of the period, $570. 

e. Accrued salaries at the end of the period, $330. 

f. Service revenue still unearned at the end of the period, $1,166. 

g. Service revenue earned but unrecorded, $3,100. 

h. Estimated income taxes for the period, $4,200. 

Required 

1. Open T accounts for the accounts in the trial balance plus the following: Interest Payable; Salaries Payable; Income Taxes Payable; Office Supplies Expense; Depreciation Expense–Office Equipment; Interest Expense; and Income Taxes Expense. Enter the balances shown on the trial balance. 

2. Determine the adjusting entries and post them directly to the T accounts. 

3. Prepare an adjusted trial balance. 

4. What financial statements do each of the above adjustments affect? What financial statement is not affected by the adjustments?

Transcribed Image Text:

Best Advisors Service, Inc. Trial Balance December 31, 2010 $ 18,500 Cash Accounts Receivable Office Supplies Prepaid Rent Office Equipment Accumulated Depreciation-Office Equipment Accounts Payable Notes Payable 8,250 2,662 1,320 9,240 $ 1,540 5,940 11,000 Unearned Service Revenue Common Stock 2,970 12,000 Retained Earnings Dividends 14,002 22,000 72,600 Service Revenue Salaries Expense Rent Expense Utilities Expense 49,400 4,400 4,280 $120,052 $120,052