On September 30, 2019, after one month of operation, the general ledger of Cross Timbers Company contained the accounts and balances shown below.

INSTRUCTIONS

1. Prepare a partial worksheet with the following sections: Trial Balance, Adjustments, and Adjusted Trial Balance. Use the data about the firm's accounts and balances to complete the Trial Balance section.

2. Enter the adjustments described below in the Adjustments section. Identify each adjustment with the appropriate letter. (Some items may not require adjustments.)

3. Complete the Adjusted Trial Balance section.

ACCOUNTS AND BALANCES

ADJUSTMENTS
a. On September 30, an inventory of the supplies showed that items costing $705 were on hand.
b. On September 1, the firm paid $4,200 in advance for six months of rent.
c. On September 1, the firm signed a six-month advertising contract for $3,750 and paid the full amount in advance.
d. On September 1, the firm paid $450 interest in advance on a three-month note that it issued to the bank.
e. On September 1, the firm purchased office furniture for $4,840. The furniture is expected to have a useful life of five years and a salvage value of $340.
f. On September 3, the firm purchased equipment for $9,000. The equipment is expected to have a useful life of five years and a salvage value of $1,200.
g. On September 1, the firm issued a two-month, 8 percent note for $5,250.
h. During September, the firm received $22,000 of fees in advance. An analysis of the firm's records shows that $7,000 applies to services provided in September and the rest pertains to future months.
Analyze:
What was the net dollar effect on income of the adjustments to the accounting records of the business?

Transcribed Image Text:

$26,460 Dr 740 Dr. 4,200 Dr. 3,750 Dr. 450 Dr. 4,840 Dr. Cash Supplles Prepald Rent Prepald Advertising Prepald Interest Furniture Accumulated Depreclatlon-Furnlture Equlpment Accumulated Depreclation-Equlpment Notes Payable Accounts Payable nterest Payable Unearned Course Fees Scott Nelson, Capital Scott Nelson, Drawing Course Fees Salarles Expense Telephone Expense Entertainment Expense Supplles Expense Rent Expense Advertising Expense Depreclation Expense- Furniture Depreclation Expense-Equipment Interest Expense 9,000 Dr. 20,250 Cr. 4,400 Cr. 22,000 Cr. 6,730 Cr 2,000 Dr. 1,600 Dr. 120 Dr. 220 Dr.