Problem 2. Below is the Unadjusted Trial Balance for ABC Co.

ABC Company

December 31, 2012

Cash $22,780

Accounts Receivable 12,100

Office Supplies 300

Prepaid Rent 2,220

Office Furniture 6,600

Accumulated Depreciation-Furniture 600

Accounts Payable 9,800

Unearned Revenue 2,000

Common Stock 10,000

Retained Earnings 15,300

Dividends 1,000

Consulting Revenue 16,000

Salaries Expense 5,500

Supplies Expense 3,000

Insurance Expense 1,200

A. Prepare the adjusting entries based on the information provided below for the year end December 31, 2012.

1. Current weekly salaries for employees are $1500. The work week is 5 days (Mon-Fri), with employees paid at the end of each Friday. December 31, 2012 is a Wednesday.

2. The Prepaid Rent applies to the twelve-month period beginning October 1, 2012.

3. Of the Unearned Revenue, 25% of the work had not been done as of year-end.

4. The Office Furniture has an estimated 3 year useful life with no salvage value.

5. .Office Supplies on hand totaled $600 at the end of December. Supplies are normally charged to expense by ABC Co. when purchased and then adjusted at year end. 6. Assume a tax rate for ABC of 20%.

B. Please indicate the amount that would be shown for Retained Earnings on the companys 12/31/12 Balance Sheet (Please note that you do not have to prepare financial statements for this problem!)