Chapter 3 Measuring Business Income: The Adjusting Process 161 Problem 3-7A Preparing an adusted trial Corsider the unsadjusted trial bulance of Burows Landscaping at December 31, 2017, and belance and the fnendal the related month-end adjustment data: statement 2 Net income, $6,550. BUIRROWS LANDSCAPING Unadjusted Trial Balance December 31, 2017 Cash s 24,500 Accounts receivable Prepaid rent 22,000 Supplies Equipment Accumulated amortization-equipment Accounts payabke Salaries payable A. Burrows, capital A. Burnows, withdrawals 5,500 66000 $ 12,650 7.200 Landscaping design rovenue Salaries expense 8200126000 Rent expense 22,500 Ublities expense 6,000 Amortization expense equipment 6,050 Supplis experse Total 268550 268,550 The follawing adjustments need to be made before the financial statements for the year can be prepaned: a. Accrued landscaping design revenue at December 31, $8,500 h One month of the prepaid rent had been used. The unadjusted prepaid balance of $9,000 relates to the four-month peried December 1,2017, through March 31, 2018 c. Supplies emaining on hand at December 31, $900 d. Amortization on equlpment foe the month of December. The equipment's expected use- ful life is 10 yearss it will have no value at the end of its useful life, and the straight-line method of amortization is used e Accrued salaries expense at December 31 should be foe two days only. The ive day weekly payroll is $10,000. Reqwired 1. Sketch T-acoounts in your notes to cakulate the rew balances. Prepare the adjusted trial balance of Burrows Landscaping at December 31, 2017 2. Prpare the income statement (necord expenses from largest to smallest on the income stalement) and the statement of owner's equity for the year ended December 31, 2017 and the balance sheet at December 31, 2017 Draw the arnows linking the three finan cial statements, or wribe a short descriptian of how they are linked 162 Part 1 The Basic Structure of Accounting