Consider the unadjusted trial balance of Hummer Limo Service at October 31, 2007, and the related month-end adjustment data.

Adjustment data:

a. Accrued service revenue at October \(31, \$ 2,000\).

b. One-fifth of the prepaid rent expired during the month.

c. Supplies on hand October 31, \$200.

d. Depreciation on automobile for the month. The auto's expected useful life is six years.

e. Accrued salary expense at October 31 for one day only. The five-day weekly payroll is \(\$ 1,000\).

Requirements 

1. Write the trial balance on a work sheet, using Exhibit 3-10 as an example, and prepare the adjusted trial balance of Hummer Limo Service at October 31, 2007. Key each adjusting entry by letter.

2. Prepare the income statement and the statement of owner's equity for the month ended October 31, 2007, and the balance sheet at that date. Draw arrows linking the three financial statements.

Exhibit 3-10

Transcribed Image Text:

HUMMER LIMO SERVICE Trial Balance October 31, 2007 Account Title Cash Accounts receivable Prepaid rent Supplies Automobile Accumulated depreciation Balance Debit Credit $ 6,300 1,000 3,000 600 72,000 $ 3,000 2,800 Accounts payable Salary payable Ben Hummer, capital 73,000 Ben Hummer, withdrawals 3,600 Service revenue 9,400 Salary expense 1,400 Rent expense Fuel expense 300 Depreciation expense Supplies expense Total $88,200 $88,200