60.1K

Verified Solution

Link Copied!

.

Shayla Green owns Creative Designs. The trial balance of the firm for January 31, 20X1, the first month of operations, is shown below: End-or-the-month adjustments must account for the following items: a. Supplies were purchased on January 1, 20xi, inventory of supplies on January 31,201, is $950 b. The prepaid advertising contract was signed on January 1,201, and covers a fourmonth period. c. Rent of $1,450 expired during the month. d. 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 owner's equity, and balance sheet. No additional investments were made by the owner during the month. 3. Journalize and post the adjusting entries. Analyze Analyze If the adjusting entries had not been made for the month, by what amount would net income be overstated or understated? curnumte tife workaheet for the mente Prepare an income statement. Complete this question by entering your answers in the tabs below. Prepare a statement of owner's equity. No additional investments were made by the owner during the month. Complete this question by entering your answers in the tabs below. Prepare a balance sheet. Journalize the adjusting entries. Journal entry worksheet Prepare the adjusting entry for supplles. Note: Enter debits before credits. Journal entry worksheet 1 4 Prepare the adjusting entry for advertising. Natei tinter debits before credits. Journal entry worksheet 1 4 Prepare the adjusting entry for rent. Wote: Enter debits before credits. Journal entry worksheet Prepare the adfusting entry for depreciation. Wate finter theb-1s before crediti. Post the adjusting entries

Answer & Explanation Solved by verified expert

See Answer