Research Associates is in the business of performing investigations and preparing financial analyses for business organizations and government agencies. Much of its work is done through a computer service center for which payment is made on an hourly basis. The company adjusts and closes its accounts monthly. At October 31, 19 _ , the account balances were as follows before adjustments were made. LO8

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(a) The amount in the Prepaid Office Rent account represented office rent for eight months paid in advance on October 1, when the lease was renewed.

(b) During October, 220 hours of computer time were used at a cost of $180 an hour.

(c) Office supplies on hand October 31 were determined by count to amount to $840.

(d) Office equipment was estimated to have a useful life of 7 years from date of purchase.

(e) Accrued interest on notes payable amounted to $96 on October 31.
(f ) Services to clients amounting to $76,440 performed during October were chargea¬
ble against the Unearned Research Fees account.
(g) Services to clients who had not made advance payments and had not been billed amounted to $35,280 at October 31. (Debit Research Fees Receivable.)
(h) Salaries earned by research staff but not paid amounted to $5,160 on October 31.
Instructions a Prepare a 10-column work sheet for the month ended October 31.
b Prepare an income statement, a statement of owner’s equity, and a balance sheet.

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Cash Research fees receivable. Prepaid office rent. .... Prepaid computer rental Office supplies Office equipment. Accumulated depreciation: office equipment. Notes payable Accounts payable Interest payable Salaries payable Unearned research fees Greg Green, capital Greg Green, drawing Research fees earned. Office salaries expense. Research salaries expense Telephone expense Travel expense Office rent expense Computer rent expense Office supplies expense Depreciation expense: office equipment Interest expense $ 71,760 28,800 42,960 4,200 25,200 600 24,000 8,760 114,600 83,820 2,400 16,200 5,040 58,320 2,640 6,660