Comprehensive Problem On July 31,2020, the end of its most recent fiscal year, Elizabeth River Business Consultants' postclosing trial balance was as follows: The company engaged in the following transactions during August 2020, and adjusts its accounts monthly: Adjustment data: 1. Adjustment of prepaid insurance for the expired portion. 2. Adjustment of prepaid rent for the expired portion. 3. Supplies used during the month were $6,250. 4. Depreciate Equipment for the month of August. 5. Accrual of interest on the note payable. (Hint: Principal x Rate x Time to compute interest.) 6. Salaries for the second half of August accrued $55,000, to be paid on September 1 . 7. Estimated utility expense for August accrued, $4,000 (invoice will be received next month). 8. Income tax expense for August, $6,000, will be paid in September. The chart of accounts for Elizabeth River Business Consultants contains the following accounts: Required: Part 1: Enter the August 1 balances in the ledger accounts; joumalize the August transactions and events, post the journals into ledger accounts, and prepare an unadjusted trial balance at August 31 Part 2: Joumalize and post the adjusting entries for the month ending August 31. Also, prepare an adjusted trial balance (use Worksheet to populate the adjustments). Part 3: Use the Work Sheet prepared in Part 2 to the extend to Income Statement and Balance Sheet and prepare an appropriately formatted income statement, retained earnings statement, and a classified Balance Sheet at August 31 . Also, joumalize and post-closing entries and complete the closing process and prepare a post-closing trial balance on August 31. Part 4: Prepare a Statement of Cash Flows for August from the other financial statements prepared in Part 3 . Elizabeth River Business Consultants Unadjusted Trial Balance Elizabeth River Business Consultants Adjusted Trial Balance Auqust 31,2020 Elizabeth River Business Consultants Post-Closing Trial Balance August 31, 2020 \begin{tabular}{|l|l|l|} \hline & \begin{tabular}{c} Debit \\ Balances \end{tabular} & \begin{tabular}{c} Credit \\ Balances \end{tabular} \\ \hline \begin{tabular}{l} Cash \\ Accounts Receivable \end{tabular} & & \\ Supplies & & \\ Prepaid Insurance & & \\ Prepaid Rent \\ Equipment \\ Accumulated Depreciation \\ Advertising Expense Payable \\ Notes Payable \\ Interest Payable \\ Income Tax Payable \\ Salaries and Wages Payable \\ Unearned Service Revenue \\ Utilities Expense Payable \\ Common Stock \\ Retained Earnings \end{tabular} Elirabeth River Business Consultants End-of-Perlod Spreadsheet (Work Sheet) Elizabeth River Business Consultants Income Statement For the Month Ended August 31,2020 Revenues: Expenses: Total expenses Net income (loss) Elizabeth River Business Consultants Retained Earnings Statement For the Month Ended August 31,2020 Elizabeth River Business Consultants Balance Sheet August 31, 2020 Assets Current assets: Total current assets Property, plant, and equipment. Total property, plant, and equipment Total assets Liabilities Current liabilities: Total Current liabilities Long-term Liabilities: Total liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity Elizabeth Rivers Consultants Statement of Cash Flows For the month EndedAugust 31, 2020 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Net cash flow from operating activities Cash flows from investing activities: Net cash flow used for investing activities Cash flows from financing activities: Net cash flow from financing activities Change in cash Cash at the beginning of the year Cash at the end of the year Non-Cash Investing and Financing Activities Equipment was purchased in exchanges for Notes Payable
