Using the information in Problem 3-9B, complete the following:

1. Set up balance column accounts for Hallmark Surveying Services and enter the balances listed in the unadjusted trial balance.

2. Post the adjusting entries prepared in Problem 3-9B to the balance column accounts.

3. Prepare an adjusted trial balance.

4. Use the adjusted trial balance to prepare an income statement, a statement of changes in equity, and a balance sheet. Assume that the owner, Ben Hallmark, made owner investments of $4,000 during the month.

Analysis Component: At December 31, 2020, how much of the business’s assets are financed by the owner? by debt? Assuming total assets at the end of the previous month totalled $84,200, did equity financing increase or decrease during December? Generally speaking, is this a favourable or unfavourable change?

For Part 1, your instructor may ask you to set up T-accounts instead of balance column accounts. The solution is available in both formats.

Problem 3-9

Ben Hallmark, the owner of Hallmark Surveying Services, has been in business for two years. The unadjusted trial balance at December 31, regarding the month just ended, follows.

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Hallmark Surveying Services Unadjusted Trial Balance December 31, 2020 Acct. No. Account Debit Credit 101 Cash. $ 15,600 106 Accounts receivable. 29,200 126 Supplies 1,640 128 Prepaid advertising.. 1,280 131 Prepaid rent. 17,880 167 Surveying equipment. 58,000 168 Accumulated depreciation, surveying equipment $ 7,348 201 Accounts payable. 13,800 Interest payable . Wages payable. Unearned surveying revenue. Notes payable. 203 -0- 210 -0- 233 14,800 251 36,000 Ben Hallmark, capital. Ben Hallmark, withdrawals. 301 28,652 302 24,300 401 Surveying revenue 170,948 601 Depreciation expense, surveying equipment. -0- 622 Salaries expense 56,000 623 39,726 Wages expense Interest expense. 633 -0- 637 Insurance expense. 6,000 640 Rent expense. -0- 650 Supplies expense. 2,958 655 Advertising expense. -0- 671 Gas and oil expense 6,564 684 Repairs expense. 12,400 690 Utilities expense -0- Totals. $271,548 $271,548