P3-70B. (Learning Objectives 3, 4: Adjust the accounts; construct the financial statements) Consider the unadjusted trial balance of Royal, Inc., at December 31, 2023, and the related month-end adjustment data.

Adjustment data at December 31, 2023, include the following:

Accrued service revenue at December 31, $3,850.

Prepaid rent expired during the month. The unadjusted prepaid balance of $3,300 relates to the period December 1, 2023, through February 28, 2024.

Supplies used during December, $2,120.

Depreciation on furniture for the month. The furnitures expected useful life is five years.

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

Prepare the adjusted trial balance of Royal, Inc., at December 31, 2023. Key each adjusting entry by letter.

Prepare the single-step income statement, the statement of retained earnings, and the classified balance sheet. Draw arrows linking the three statements.