A six-column table for Yan Consulting Company follows. The first two columns contain the unadjusted trial balance for the company as of December 31, 2013, and the last two columns contain the adjusted trial balance as of the same date.

Required

Analysis Component

1. Analyze the differences between the unadjusted and adjusted trial balances to determine the eight adjustments that likely were made. Show the results of your analysis by inserting these adjustment amounts in the table’s two middle columns. Label each adjustment with a letter a through h and provide a short description of it at the bottom of the table.

Preparation Component

2. Use the information in the adjusted trial balance to prepare this company’s (a) income statement and its statement of owner’s equity for the year ended December 31, 2013 (Z. Yan, Capital at December 31, 2012, was $80,200, and the current-year withdrawals were $20,000), and (b) the balance sheet as of December 31, 2013.

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Adjusted Unadjusted Trial Balance Adjustments Trial Balance $ 45,000 $ 45,000 Cash ... 60,000 Accounts receivable 66,660 Office supplies .. Prepaid insurance Office equipment 40,000 17,000 8,200 3,600 120,000 120,000 Accumulated depreciation- Office equip.. Accounts payable $ 20,000 $ 30,000 32,000 26,000 Interest payable Salaries payable 2,150 16,000 Unearned consulting fees Long-term notes payable Common stock.. Retained earnings.. 40,000 27,800 75,000 75,000 4,000 4,000 76,200 76,200 Dividends... 20,000 20,000 234,600 Consulting fees earned Depreciation expense- Office equip. 253,460 10,000 Salaries expense 112,000 128,000 Interest expense 8,600 10,750 Insurance expense 4,600 20,000 Rent expense Office supplies expense Advertising expense Totals 20,000 ...... 23,000 42.000 48,000 $475,800 $475,800 $516,610 $516,610