$ 58 39 1 H Cash Accounts receivable. Office supplies STILLMORE INVESTIGATIONS Unadjusted Trial Balance December...

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$ 58 39 1 H Cash Accounts receivable. Office supplies STILLMORE INVESTIGATIONS Unadjusted Trial Balance December 31, 2007 $40,585 2,000 206 Prepaid rent Unexpired insurance. Office equipment... Accounts payable. Interest payable Income taxes payable. 1.200 270 54,000 Accumulated depreciation: office equipment $35,250 1,400 360 1,750 Note payable. Uneamed retainer fees. Capital stock. 9,000 3.500 30.000 Retained earings 8,000 Dividends. 1,000 Client fees amed 00,000 Office supplies expense 605 Depreciation expense office equipment.. 8.250 Rent expense. 5,775 Insurance expense. 1,010 Salaries expense 27,100 Interest expense. 360 Income taxes expense Totals 6,900 $149.260 $140,250 Instructions a. For each of the above numbered paragraphs, prepare the necessary adjusting entry (including an explanation). b. Prepare the company's adjusted trial balance dated December 31, 2007. c. Using figures from the adjusted trial balance prepared in b, compute net income for the year ended December 31, 2007. d. How much was the company's average monthly rent expense in January through September of 2007? Explain your answer. e. How much was the company's average monthly insurance expense in January and February of 2007? Explain your answer. f. If the company purchased all of its office equipment when it first began operations, for how many months has it been in business? Explain your answer. g. Indicate the effect of each adjusting entry prepared in part a on the major elements of the company's income statement and balance sheet. Organize your answer in tabular form using the column headings shown. Use the symbols I for increase, D for decrease, and NE for no effect. The answer for adjusting entry number 1 is provided as an example. $ 58 39 1 H Cash Accounts receivable. Office supplies STILLMORE INVESTIGATIONS Unadjusted Trial Balance December 31, 2007 $40,585 2,000 206 Prepaid rent Unexpired insurance. Office equipment... Accounts payable. Interest payable Income taxes payable. 1.200 270 54,000 Accumulated depreciation: office equipment $35,250 1,400 360 1,750 Note payable. Uneamed retainer fees. Capital stock. 9,000 3.500 30.000 Retained earings 8,000 Dividends. 1,000 Client fees amed 00,000 Office supplies expense 605 Depreciation expense office equipment.. 8.250 Rent expense. 5,775 Insurance expense. 1,010 Salaries expense 27,100 Interest expense. 360 Income taxes expense Totals 6,900 $149.260 $140,250 Instructions a. For each of the above numbered paragraphs, prepare the necessary adjusting entry (including an explanation). b. Prepare the company's adjusted trial balance dated December 31, 2007. c. Using figures from the adjusted trial balance prepared in b, compute net income for the year ended December 31, 2007. d. How much was the company's average monthly rent expense in January through September of 2007? Explain your answer. e. How much was the company's average monthly insurance expense in January and February of 2007? Explain your answer. f. If the company purchased all of its office equipment when it first began operations, for how many months has it been in business? Explain your answer. g. Indicate the effect of each adjusting entry prepared in part a on the major elements of the company's income statement and balance sheet. Organize your answer in tabular form using the column headings shown. Use the symbols I for increase, D for decrease, and NE for no effect. The answer for adjusting entry number 1 is provided as an example.