Consider the unadjusted trial balance of Burrows Landscaping at December 31, 2020, and the related month-end adjustment data:

The following adjustments need to be made on December 31 before the financial statements for the year can be prepared:

a. Accrued landscaping design revenue, \(\$ 8,500\).

b. One month of the prepaid rent had been used. The unadjusted prepaid balance of \(\$ 9,000\) is for a period of four months.

c. Supplies remaining on hand, \(\$ 900\).

d. Amortization on equipment for the month of December. The equipment's expected useful life is 10 years; it will have no value at the end of its useful life, and the straight-line method of amortization is used.

e. An accrual for two days of salaries is needed. A five-day weekly payroll is \(\$ 10,000\).
Required 1. Sketch T-accounts in your notes to calculate the new balances. Prepare the adjusted trial balance of Burrows Landscaping at December 31, 2020.
2. Prepare the income statement (record expenses from largest to smallest on the income statement) and the statement of owner's equity for the year ended December 31, 2020, and the balance sheet at December 31, 2020. Draw the arrows linking the three financial statements, or write a short description of how they are linked.

Transcribed Image Text:

BURROWS LANDSCAPING Unadjusted Trial Balance December 31, 2020 Account Title Cash Accounts receivable Supplies Prepaid rent Equipment Debit Credit $ 34,500 22,000 5,500 9,000 66,000 Accumulated amortization-equipment $ 12,650 Accounts payable 7,200 Salaries payable 0 A. Burrows, capital 122,700 A. Burrows, withdrawals 25,000 Landscaping design revenue 136,000 Salaries expense 82,000 Rent expense 22,500 Utilities expense 6,000 Amortization expense-equipment 6,050 Supplies expense 0 Total $278,550 $278.550