Fox Enterprises is owned by Edmund Fox and has a January 31 fiscal year end. The company prepares adjusting entries on an annual basis. The following trial balance was prepared before adjustments:

Additional information:

1. A one-year insurance policy was purchased on July 1, 2020.

2. A count of supplies on January 31, 2021, shows $920 of supplies on hand.

3. The equipment has an estimated useful life of fi ve years.

4. An analysis of the Unearned Revenue account shows that $5,230 of the services had been provided by January 31, 2021.

5. The eight-month, 6% note was issued on November 1, 2020. Interest and principal are due on the maturity date.6. Salaries accrued to January 31, 2021, were $1,315.

7. On January 31, 2021, the company had provided services but not billed or recorded service revenue of $2,675.

8. The telephone bill for January 2021 was $170. It has not been recorded or paid. (Use the Accounts Payable account.)

Instructions

a. Prepare T accounts and enter the unadjusted trial balance amounts.

b. Prepare and post the monthly adjusting journal entries on January 31.

c. Prepare an adjusted trial balance at January 31.

d. Prepare an income statement and a statement of owner?s equity for the year ended January 31, and a balance sheet as at January 31, 2021.

Comment on the company?s results of operations and its financial position. In your analysis, refer to specific items in the financial statements.

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FOX ENTERPRISES Trial Balance January 31, 2021 Debit Credit $ 4,970 Cash Accounts receivable Prepaid insurance Supplies Equipment Accumulated depreciation-equipment Accounts payable Notes payable 14,540 3,960 6,580 32,350 $ 12,940 7,760 11,000 Unearned revenue 7,480 E. Fox, capital E. Fox, drawings 18,320 119,000 Service revenue 214,500 Rent expense Salaries expense Telephone expense 20,750 66,950 2,900 $272,000 $272,000