4. Terrific Temps fills temporary employment positions for local businesses. Some businesses pay in advance for services; others are billed after services have been performed. Advance payments are credited to an account entitled Unearned Fees. Adjusting entries are performed on a monthly basis. Below is an Unadjusted Trial Balance dated December 31, Current Year. (Bear in mind that adjusting entries have already been made for the first 11 months, but not for December.) (20 POINTS)

Additional Information:

Accrued but unrecorded fees earned as of December 31 amount to $1,500.

Records show that $2,500 of cash receipts originally recorded as unearned fees had been earned as of December 31.

The company purchased a six-month insurance policy on September 1, Current Year for $1,800.

On December 1, Current Year, the company paid its rent through February 28, Upcoming Year.

Office Supplies on hand on December 31 amount to $400.

All equipment was purchased when the business first formed. The estimated life of equipment at that time was 10 years (or 120 months).

On August 1, Current Year, the company borrowed $12,000 by signing a 6-month, 8% note payable. The entire note, plus 6 months accrued interest, is due on February 1, Upcoming Year.

Accrued but unrecorded salaries on December 31 amount to $2,700.

Estimated Income Taxes Expense for the entire year totals $15,000. Taxes are due in the First Quarter, Upcoming Year

Instructions:

Prepare the necessary adjusting entries, including an explanation.

Given the Unadjusted Trial Balance for Terrific Temps, provide the adjusting entries to complete the Terrific Temps Adjusted Trial Balance Excel Workbook.

Prepare Terrific Temps Income Statement, Statement of Retained Earnings and Balance Sheet.

TERRIFIC TEMPS UNADJUSTED TRIAL BALANCE DECEMBER 31, CURRENT YEAR