Reference no: EM132961005

The trial balance of Chelsea Elliott, marketing services provider, at 30 June 2019 was as follows (ignore GST).

Debit

Cash at bank $7780

AR $21700

Prepaid Rent $2100

Prepaid Insurance $2730

Office supplies $4020

Office equipment $12200

Drawings $52000

Salaries Revenue $57200

Telephone expense $6100

Rent expense $10200

Credit

Accumulated Dep - office equipment $2470

AP $2800

Unearned fees $1100

Loan Payable - due 2019 $9200

Capital $22060

Fees revenue $138400

Required:

Problem (a) Using the following information, prepare adjusting entries. Use the accounts shown in the trial balance and these additional accounts: Salaries Payable, Interest Payable, Telephone Account Payable, Depreciation Expense, Office Supplies Expense, Insurance Expense, Interest Expense.

1) Interest expense of $520 has accrued on the loan payable.

2) A physical count of office supplies on 30 June shows $560 of unused supplies on hand.

3) Depreciation of the office equipment this year is estimated to be $1020.

4) Half the amount in the Unearned Fees account had been earned by the end of the year.

5) The amount in the Prepaid Rent account covers this June and the next 2 months.

6) Of prepaid insurance, 80% expired this period.

7) Salaries expense accrued for the last 4 days in June amounts to $1660.

8) The telephone expense for June of $670 has not been recorded or paid. No tax invoice has been issued.

Problem (b) Open T accounts for the accounts shown in the trial balance and enter the 30 June balance in each account. Post the adjusting entries to the T accounts as well as the closing entries.

Problem (c) Prepare an adjusted trial balance, an income statement and a statement of financial position.