Mastery Problem: The Adjusting Process. Unadjusted Financial Statements These financial statements were prepared from the unadjusted trial balance. Cole Designs Inc. Income Statement For the Year Ended December 31, 20Y3 Fees earned $70,200 Wages expense (44,750) Net income $25,450 Cole Designs Inc. Balance Sheet December 31, 2013 Assets Cash Accounts receivable Supplies Prepaid insurance Office equipment Total assets Liabilities Unearned fees Stockholders' Equity Common stock Retained earnings Total liabilities and stockholders equity $4,000 32,600 3.600 3,400 11,000 354,600 $8.000 $12.000 34,600 46,600 $54,600 Adjusted Financial Statements These financial statements were prepared from the adjusted ell balance Cole Designs Inc. These financial statements were prepared from the adjusted trial balance. Cole Designs Inc. Income Statement For the Year Ended December 31, 2013 Fees earned $76,400 Expenses: Wages expense $47,200 Supplies expense 3,520 Insurance expense 2,200 Depreciation expense 1,900 Total expenses (54,820) Net income $21,580 Cole Designs Inc. Balance Sheet December 31, 2013 Assets Cash $4,000 33,400 80 1.200 511.000 (1,900) 9.100 547,780 Accounts receivable Supplies Prepaid insurance Office equipment Accumulated depreciation-office equipment Total assets Liabilities Wages payable Unearned fees Total liabilities Stockholders' Equity Common stock 52.450 2.600 55,050 Retained earnings $12.000 30.730 42,730 1,200 $11,000 (1,900) 9,100 $47,780 Prepaid insurance Office equipment Accumulated depreciation-office equipment Total assets Liabilities Wages payable Unearned fees Total liabilities Stockholders' Equity Common stock Retained earnings Total liabilities and stockholders' equity $2,450 2,600 $5,050 $12,000 30,730 42,730 $47,780