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Paula Judge owns Judge Creative Designs. The trial balance of the firm for January 31, 2019, the first month of operations, is shown below. End-of-the-month adjustments must account for the following items:

1. Supplies were purchased on January 1, 2019; inventory of supplies on January 31, 2019, is $1,250.
2. The prepaid advertising contract was signed on January 1, 2019, and covers a four-month period.
3. Rent of $1,750 expired during the month.
4. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of 10 years with no salvage value.

Required:

1. Complete the worksheet for the month.
2. Prepare an income statement, statement of owners equity, and balance sheet. No additional investments were made by the owner during the month.
3. Journalize and post the adjusting entries.

Analyze If the adjusting entries had not been made for the month, would net income be overstated or understated?

Complete this question by entering your answers in the tabs below.

• Req 1
• Req 2 Inc Stmt
• Req 2 Stmt of OE
• Req 2 Bal Sheet
• Req 3 Gen Journal
• Req 3 Ledgers
• Analyze

Complete the worksheet for the month.

JUDGE CREATIVE DESIGNS Worksheet Month Ended January 31, 2019 Account Name Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Cash $35,800 Accounts Receivable 12,900 Supplies 8,350 Prepaid Advertising 9,600 Prepaid Rent 21,000 Equipment 25,200 Accumulated DepreciationEquipment Accounts Payable 15,850 Paula Judge, Capital 60,300 Paula Judge, Drawing 7,300 Fees Income 55,550 Advertising Expense Depreciation ExpenseEquipment Rent Expense Salaries Expense 10,000 Supplies Expense Utilities Expense 1,550 SubTotals $131,700 $131,700 Totals

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