Raul Rojas owns Rojas Estate Planning and Investments. The trial balance of the firm for June 30, 2013, the first month of operations, is shown below.

INSTRUCTIONS
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. Use 3 for the journal page number. Use the account numbers provided in Problem 5.4A.
End-of-month adjustments must account for the following:
a. The supplies were purchased on June 1, 2013; inventory of supplies on June 30, 2013, showed a value of $3,000.
b. The prepaid advertising contract was signed on June 1, 2013, and covers a four-month period.
c. Rent of $3,000 expired during the month.
d. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of five years with no salvage value.
Analyze:
Why the costs that reduce the value of equipment not directly are posted to the asset account Equipment?

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Rojas Estate Planning and Investments Worksheet (Partial) Month Ended June 30, 2013 TRIAL BALANCE ADJUSTMENTS ACCOUNT NAME DEBIT CREDIT DEBIT CREDIT 970 000 1Cash 2 Accounts Receivable 3 Supplies 6 100 00 기610 0100 14 4 0 000 36 000 00 48 000 00 Prepoid Advertising Prepaid Rent 6 Equipment Accumuloted Depreciation Equipment 10 8 0000 60 1 00 00 Accounts Payable Paul Rojas, Capital Paul Rojas, Drawing 400,0 00 11 Fees Income 73800 00 2 Advertising Expense 13 Depreciation Expense-Equipment 141 Rent Expense 16 Supplies Expense 8 Totals 15 Solaries Expense 기61010100 1 3 00 00 144 7 0 000 17 Utilities Expense 144 7 0 0 00 19 JT's Accounting Services Worksheet Month Ended December 31, 2013 TRIAL BALANCE ADJUSTMENTS ACCOUNT NAME DEBIT CREDIT DEBIT CREDIT 33 9 0000 4 4 0 0l00 3 00 000 8000 00 36 0 0 0 00 1 Cash 2 Accounts Receivable Supplies a Prepaid Advertising s Fixtures () 1 200 00 b 16000 Accumuloted Depreciation- Fixtures (c) 0 000 15 00 0 00 60 00 000 Accounts Payable Jason Taylor, Capital 9 Jason Taylor, Drowing 1o Fees Income 6 00 0 00 52 6 60 00 Advertising Expense 2 Depreciation Expense- Fixtures 13 Rent Expense 14 Salaries Expense 15 Supplies Expense 16 Utilities Expense 17 Totals 18 (b) 160 0 00 (c)60 0 00 37 2 0 000 (a) 1 20 000 21 6 0 00 137 6 6 0 00 1376 6 000 3 4 0 000 3 4 00 00 Net Income 20