During the first year-end closing of the accounts of Victoria Shaw's law practice, the office bookkeeper became serious ill and entered the hospital, unable to have visitors. Ms. Shaw is certain the bookkeeper prepared a work sheet and complete financial statements, but she has only the income statement and cannot find the work sheet or remaining statements. She does have the unadjusted trial balance. She has asked you to take the information she has and prepare adjusting and closing entries. She also wants you to prepare a statement of changes in owner's equity and a classified balance sheet. She says the \(\$ 1,800\) of unearned legal fees on the trial balance represents a retainer fee paid by Guaranty Bank. The bank retained Victoria Shaw on November 1 to do its legal work, and agreed to pay her \(\$ 600\) per month for her services. She says she has also agreed with Eastside Realty to do its legal work on a fixed-fee basis. The agreement calls for a \(\$ 450\) monthly fee payable at the end of each three months. The agreement was signed on December 1 , and one month's fee has accrued but has not been recorded. Ms. Shaw did not make any additional investments in the business during the year.

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VICTORIA SHAW, ATTORNEY Unadjusted Trial Balance December 31, 1990 Cash.. $ 1,835 Legal fees receivable. 2,250 Office supplies 490 Prepaid insurance 1,350 Furniture and equipment 18,750 Accounts payable $ 525 Short-term notes payable 7,500 Unearned legal fees. 1,800 Victoria Shaw, capital. 11,250 Victoria Shaw, withdrawals 27,000 Legal fees earned 55,985 Salaries expense. Rent expense. Telephone expense Totals 17,625 7,200 560 . $77,060 $77,060