Harry and Sons’ Law Offices opened on January1,2018. During the first year of business the company had thefollowing transactions.

January 2: The owners Invested 300,000 (the par value of thestock) into the business and acquired 30,000 shares of common stockin return.

January 15: Harry and Sons’ bought an office building in theamount of $85,000. The company took out a long-term note from thebank to finance the purchase.

February 12: Harry and Son’ billed clients for $85,000 ofservices performed.

March 1: Harry and Sons’ took out a two-year insurance policy,which it paid cash for in the amount of $18,000.

March 10: harry collected $30,000 from clients toward theoutstanding accounts receivable balance.

May 13: Harry received cash payments totaling $270,000 for legalservices-$55,000 was for services previously billed to customers onFebruary 12 and the remainder was for services provided in May notyet recorded.

June 10: Harry purchased office supplies in the amount of$25,000, all on credit.

July 15: Harry paid wages of $24,000 in cash to office staffworkers.

August 8: Harry paid off the $25000 balance owed to a supplierfor the purchase made June 10.

September 3:Harry and Sons’ purchased $5,000 of office suppliesin cash.

September 20: The company paid $14,000 cash for utilities.

October 1: Harry and Sons’ paid wages in the amount of $22,000to office workers.

December 1: Harry and Sons’ received cash payments from clientsin the amount of $310,000 for services to be performed in theupcoming months.

December 31: Harry declared and paid a $18,000 dividend.

*Additional Information

• Of the cash payments received from customers on December 1, halfof these services were performed in December and half relates tofuture services to be rendered in the followingyear.   

• Ten months of the insurance policy expired by the end of theyear.

• Depreciation for the full year should be recorded on thebuilding purchased. the building has a 20-year life and no residualvalue. Depreciation will be recorded on a straight-line bases.

• A total of $12,000 of office supplies remains on hand at the endof the year.

• Interest Expense in the amount of $4,250 should be accrued onthe note payable.

• Wages in the amount of $48,000 must be accrued at year end to bepaid in January.

Harry’s Unadjusted Trial Balance at December 31,2018is as follows.

Unadjusted Trial Balance

At December 31,2018

Account Debit Credit

Cash $784,000

Office Supplies 30,000

Prepaid Insurance 18,000

Building 85,000

Unearned Service Revenue $310,000

Notes Payable 85,000

Common Stock 300,000

Dividends 18,000

Service Revenue 300,000

Wage Expense 46,000

Utilites Expense 14,000

Total: $995,000 $995,000

Requirements

A) Journalize and post adjusting journalentries for Harry and Sons’.

B) Post the adjusting Journal entries to theT-accounts to obtain the adjusted balances.

C) Prepare a Single-Step Income Statement,Statement of Shareholders Equity, and a Balance Sheet.