Salzer Graphics Company was organized on January l, 2006, by Jill Salzer. At the end of the first 6 months of operations, the trial balance contained the following accounts.

Analysis reveals the following additional data.
1. The $3,700 balance in Supplies Expense represents supplies purchased in January. At June 30, $1,300 of supplies was on hand.
2. The note payable was issued on February 1. It is a 12%, 6-month note.
3. The balance in Insurance Expense is the premium on a one-year policy, dated March 1, 2006.
4. Consulting fees are credited to revenue when received. At June 30, consulting fees of $1,100 are unearned.
5. Graphic revenue earned but unrecorded at June 30 totals $2,000.
6. Depreciation is $3,000 per year.
Instructions

(a) Journalize the adjusting entries at June 30. (Assume adjustments are recorded every 6 months.)

(b) Prepare an adjusted trial balance.

(c) Prepare an income statement and a retained earnings statement for the 6 months ended June 30 and a balance sheet at June 30.

Transcribed Image Text:

Debits Cash $ 9,500 Accounts Receivable. 14,000 Notes Payable Accounts Payable Equipment 45,000 Common Stock Credits $ 20,000 9,000 22,000 Insurance Expense 1,800 Retained Earnings Salaries Expense 30,000 Supplies Expense 3,700 Graphic Revenue Consulting Revenue ---0- 52,100 6,000 Advertising Expense 1,900 Rent Expense 1,500 Utilities Expense 1,700 $109,100 $109,100