Consider the unadjusted trial balance of Burrows Landscaping at December 31, 2014, and the related month-end adjustment data.

The following adjustments need to be made before the financial statements for the year can be prepared:
Adjustment data:
a. Accrued landscaping design revenue at December 31, $8,500.
b. One month of the prepaid rent had been used. The unadjusted prepaid balance of $9,000 relates to the four-month period December 1, 2014, through March 31, 2015.
c. Supplies remaining on hand at December 31, $900.
d. Amortization on equipment for the month of December. The equipment's expected useful life is 10 years; it will have no value at the end of its useful life, and the straight-line method of amortization is used.
e. Accrued salaries expense at December 31 should be for two days only. The five-day weekly payroll is $10,000.
Required
1. Recopy the trial balance using the format in Exercise 3-10 (page 161), and prepare the adjusted trial balance of Burrows Landscaping at December 31, 2014. Identify each adjusting entry by its letter.
2. Prepare the income statement and the statement of owner's equity for the year ended December 31, 2014, and the balance sheet at December 31, 2014. Draw the arrows linking the three financial statements, or write a short description of how they are linked.

Transcribed Image Text:

BURROWS LANDSCAPING Unadjusted Trial Balance December 31, 2014 $ 24,500 Cash Accounts receivable 22,000 Prepaid rent 9,000 Supplies 5,500 Equipment 66,000 $ 12,650 Accumulated amortization-equipment Accounts payable Salaries payable 7,200 A. Burrows, capital 122,700 A. Burrows, withdrawals 25,000 Landscaping design revenue 126,000 Salaries expense 82,000 Rent expense 22,500 Utilities expense 6,000 Amortization expense-equipment 6,050 Supplies expense $268,550 $268,550 Total