Create an unadjusted trial balance as at January 31st.
Having created the unadjusted trial balance, you receive an email with the following attachment – notes from a recent management meeting:
1. Depreciation and amortization are amortized on a straight-line basis. Equipment is depreciated over a five-year term and intangible assets over ten years. Equipment is expected to have no salvage value.
2. The sales manager recently confirmed that $8,000 in deferred revenue has been earned in the month of January. She also confirmed that $15,000 in accounts receivable has been collected.
3. The H.R. Manager confirmed that $5,000 in wages were owed at the end of January. They will be paid on Feb. 3rd.
4. An inventory of the office supplies room was completed by a student intern from NU. He determined that there were $18,000 in office supplies remaining.
5. It was confirmed that $40,000 in various accounts payable were paid during the month.
6. The C.F.O. has confirmed that it is company policy that when completing an adjusted trial balance taxes payable are to accrued and recognized. The company’s tax rate is 20%

Here is the information the the adjusted balance is based upon

1. Opened business with an initial deposit of $500,000 received from the sale of common stock.
2. Management signed a $100,000 three-year promissory note to Big Bank (8% rate to be paid January 1st of each year the note is outstanding).
3. Paid $2,000 to Fun Copy for creation of company logo.
4. Purchased $50,000 of equipment. Issued two-year promissory note for $25,000 (10% paid Dec. 31st of each year) and paid remainder in cash.
5. Purchased on account $30,000 office supplies.
6. Purchased on account $75,000 inventory from Good Wholesalers.
7. Paid $25,000 to settle various accounts payable.
8. Sold $100,000 in merchandise (cash and carry).
9. Sold $70,000 in merchandise on account.
10. Received cheque in amount of $30,000 from Bombay Co. for services to be rendered over the next 5-6 months.
11. Paid $7,000 in wages to staff.
12. Jan. 1st, paid $12,000 in advance for rent over the next twelve-months ($1,000 per month).
13. Received $10,000 bill for advertising campaign, due and payable February 28th.
14. Paid $1,500 cash for utilities.
15. Jan. 1st, paid $12,000 cash for a twenty-four-month fire, theft and business interruption insurance contract.