E G H Problem 4.17 NOTE: Please use 3 The financial year for Drip Dry Cleaning Services ends on 30 June. Using the following information, make the necessary adjusting entries at year- 1 On 15 February, Danielle Drip's business borrowed $16 000 from Northern Bank at 8% interest. The principal and interest are payable 4 on 15 August. 15 Rent of $3600 for the 6-month period ending 31 July is due to be paid in August. The annual depreciation on equipment is estimated to be $7200. The 1 July balance in the Accumulated Depreciation account was $15 6 600. 4 Drip Dry Cleaning Services purchased a 1-year insurance policy on 1 March of the current year for $660. A 3-year policy was purchased on 1 November of the previous year for $2700. Both purchases were recorded by debiting Prepaid Insurance. 5 The business has two part-time employees who each earn $220 a day. They both worked the last 3 days in June for which they have not yet been paid. 6 On 1 June, the Highup Hotel paid the business $2100 in advance for doing their dry deaning for the next 3 months. This was recorded by 9. a credit to Unearned Dry Cleaning Revenue. 10 Water for June of $850 is unpaid and unrecorded. The supplies account had a $280 debit balance on 1 July. Supplies of $1560 were purchased during the year and $190 of supplies are on 11 hand as at 30 June. 12 Balance Balance in the Dollar effect reported in account before of adjusting 30/6 balance Balance sheet Entry Account adjustment entries sheet classification" 1. Interest Payable 2. Rent Payable 3. Accumulated Depreciation 4. Prepaid Insurance 5. Wages Payable Unearned Dry Cleaning Revenue 7 Electricity Account Payable Supplies "For each account, indicate whether it is an asset, liability or equity, and whether it is classified as a current or non- current asset or liability. As you know, all adjusting entries affect one statement of financial position account and one income statement account. Based on your adjusting 25 entries prepared: 26 (B) i) complete the schedule given below and ii) calculate the increase or decrease in profit 28