Consider the unadjusted trial balance of London, Inc., at December 31, 2010, and the related month-end adjustment data.

Adjustment data December 31, 2010:
a. Accrued service revenue at December 31, $2,100.
b. Prepaid rent expired during the month. The unadjusted prepaid balance of $2,400 relates to the period December 1, 2010 through February, 2011.
c. Supplies used during December, $2,170.
d. Depreciation on furniture for the month. The estimated useful life of the furniture is three years.
e. Accrued salary expense at December 31 for Monday, Tuesday, and Wednesday. The five-day weekly payroll of $4,800 will be paid on Friday.

Requirements
1. Using Exhibit as an example, prepare the adjusted trial balance of London, Inc., at December 31, 2010. Key each adjusting entry by letter.
2. Prepare the monthly income statement, the statement of retained earnings, and the classified balance sheet. Draw arrows linking the threestatements.

Transcribed Image Text:

London, Inc. Trial Balance Work Sheet December 31, 2010 Trial Balance Adjustments Adjusted Trial Balance Account Debit Credit Credit Debit Credit Accounts receivable. 72,000 Accumulated depreciation.. Retained earnings.. r.. 63,110 Utilities expense Depreciation expense 93,310 93,310