The following is Elbow Cycle Repair Shop's trial balance at January 31, 2014, the company's fiscal year end:

Additional information:
1. Service revenue earned but not recorded at January 31, 2014, was $1,550.
2. The 12-month insurance policy was purchased on March 1, 2013.
3. A physical count of supplies shows $580 on hand on January 31, 2014.
4. The building has an estimated useful life of 45 years. The equipment has an estimated useful life of 15 years.
5. Salaries of $1,520 are accrued and unpaid at January 31, 2014.
6. The mortgage payable has a 6% interest rate. Interest is paid on the first day of each month for the previous month's interest.
7. By January 31, 2014, $850 of the unearned revenue has been earned.
8. During the next fiscal year, $4,500 of the mortgage payable is to be paid.
Instructions
(a) Prepare the adjusting entries.
(b) Prepare an adjusted trial balance.
(c) Prepare an income statement, statement of owner's equity, and classified balance sheet. The owner, Henry Dude, invested $5,000 cash in the business on November 17, 2013.
(d) Prepare the closing entries.
Taking It Further
Henry Dude is concerned that he had to invest cash in the business this year. Based on the information in the financial statements, what do you suggest to Henry?

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ELBOW CYCLE REPAIR SHOP Trial Balance January 31, 2014 Debit Credit Cash Accounts receivable Prepaid insurance Supplies Land Building Accumulated depreciation-building Equipment Accumulated depreciation-equipment Accounts payable Unearned revenue Mortgage payable H. Dude, capital H. Dude, drawings Service revenue Salaries expense Utilities expense Interest expense $ 3,200 6,630 6,420 5,240 50,000 90,000 $ 11,000 27,000 4,500 6,400 1,950 102,000 61,000 101,100 235,550 115,200 12,000 5,610 $422,400 $422,400