E3-14 Refer to Exercise 2-15 of Chapter 2. Start from the trial balance and the posted T-accounts that Amos Faraday, Consultant, prepared for his business at December 18. as follows: AMOS FARADAY, CONSULTANT Trial Balance December 18, 20XX Cash Account Accounts receivable Supplies Equipment Furniture Accounts payable. Amos Faraday, capital. Amos Faraday, withdrawals. Service revenue Rent expense Utilities expense. Salary expense. Total. Debit Credit $12,100 1,700 300 2.000 3.600 $ 3,900 14,000 2.500 500 2001 $20.400 $20,400 Later in December, the business completed these transactions, as follows: Dec. 21 Received $900 in advance for client service to be performed evenly over the next 30 days. 21 Hired a secretary to be paid $1.500 on the 20th day of each month. The secre- tary begins work immediately. 26 Paid $300 on account. 28 Collected $600 on account. 30 Withdrew $1.600 for personal use.

Required 1. Open these additional T-accounts: Accumulated Depreciation-Equipment: Ac- cumulated Depreciation-Furniture: Salary Payable; Unearned Service Revenue: Depreciation Expense-Equipment; Depreciation Expense-Furniture: Supplies Expense. 2. Journalize the transactions of December 21-30. 3. Post to the T-accounts, keying all items by date. 4. Prepare a trial balance at December 31. Also set up columns for the adjustments and for the adjusted trial balance, as illustrated in Exhibit 3-10. 5. At December 31. Faraday gathers the following information for the adjusting entries:

a. Accrued service revenue, $400.

b. Earned a portion of the service revenue collected in advance on December 21.

c. Supplies on hand, $100.

d. Depreciation expense-equipment, $50; furniture. $60.

e. Accrued expense for secretary's salary-10 days worked. Make these adjustments directly in the adjustments columns, and complete the adjusted trial balance at December 31. Throughout the book, to avoid rounding errors, we base adjusting entries on 30-day months and 360-day years. 6. Journalize and post the adjusting entries. Denote each adjusting amount as Adj. and an account balance as Bal. 7. Prepare the income statement and the statement of owner's equity of Amos Faraday. Consultant, for the month ended December 31, and prepare the balance sheet at that date.