The unadjusted T-accounts of Paladdin Investment Advisers, at December 31, 2007, and the related year-end adjustment data follow.

Adjustment data at December 31, 2007:

a. Unearned service revenue earned during the year, \(\$ 1,000\).

b. Supplies on hand, \(\$ 1,000\).

c. Depreciation for the year, \(\$ 9,000\).

d. Accrued salary expense, \(\$ 1,000\).

e. Accrued service revenue, \(\$ 2,000\).

Requirements 

1. Enter the account data in the Trial Balance columns of a work sheet, and complete the work sheet. Key each adjusting entry by the letter corresponding to the data given. List all the accounts, including those with zero balances. Leave a blank line under Service Revenue.

2. Prepare the income statement, the statement of owner's equity, and the classified balance sheet in account format.

3. Did Paladdin have a good or a bad year during 2007? Give the reason for your answer.

Transcribed Image Text:

Cash Bal. 15,000 Accumulated Depreciation Bal. 13,000 Note Payable, Long-Term Bal. 60,000 Service Revenue Bal. 182,000 Depreciation Expense Accounts Receivable Supplies Equipment Bal. 36,000 Bal. 9,000 Bal. 99,000 Accounts Payable Salary Payable Bal. 6,000 Unearned Service Revenue Bal. 5,000 S. Paladdin, Capital S. Paladdin, Withdrawals Bal. 36,000. Bal. 62,000 Salary Expense Supplies Expense Bal. 53,000 Interest Expense Rent Expense Insurance Expense Bal. 6,000 Bal. 15,000 Bal. 7,000