You have been given the following information for RPE Consulting for the year ended July 31, 2020.

Required

1. Prepare the company’s income statement, statement of changes in equity, and balance sheet. Assume that  the owner, Ray Edds, invested $20,000 during the year ended July 31, 2020.

Analysis Component:

2. Analyze the unadjusted and adjusted trial balances and identify the adjustments that must have been made by inserting them in the two middle columns. Label each entry with a letter.

3. If the adjustments had not been recorded, identify the net overstatement/understatement of each component  of the accounting equation.

Transcribed Image Text:

1234567 000 Account 7 Accounts payable 8 Accounts receivable 9 Accumulated depreciation, office equipment 10 Advertising expense 11 Cash 12 Consulting revenue 13 Depreciation expense, office equipment 14 Insurance expense 15 Interest expense 16 Interest payable 17 Notes payable 18 Office equipment 19 Office supplies 20 Office supplies expense 21 Prepaid insurance 22 Ray Edds, capital 23 Ray Edds, withdrawals 24 Rent expense 25 Salaries expense 26 Salaries payable 27 Unearned consulting revenue 28 Totals RPE Consulting Trial Balances July 31, 2020 Unadjusted Trial Balance Dr. $ 12,000 13,800 27,000 -0- 1,400 92,000 18,000 7,320 10,000 13,200 71,000 Cr. $ 9,300 12,000 156,000 -0- 44,000 28,420 -0- 16,000 $ 265,720 $ 265,720 Adjustments Dr. Cr. Adjusted Trial Balance Dr. $ 22,460 14,700 27,000 6,000 2,440 2,200 92,000 3,000 15,000 4,880 10,000 13,200 77,600 Cr. $ 10,200 18,000 168,160 800 44,000 28,420 6,600 14,300 $ 290,480 $ 290,480