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On September 1, 2019, Winnie-the-Pooh, a lawyer, opened his own legal practice. The business adjusts and closes its accounts at the end of each month.

On September 1, 2019, Winnie-the-Pooh, a lawyer, opened his own legal practice. The business adjusts

and closes its accounts at the end of each month. The following trial balance was prepared after one

month of operations:

Winnie-the-Pooh Law Firm

Unadjusted Trial Balance

September 30, 2019

Account Title and Explanation Debit Credit

Cash 10,060

Accounts Receivable 0

Prepaid Expenses 7,800

Supplies 1,460

Office Equipment 26,400

Accumulated Deprn - Off Eqpt 0

Notes Payable 16,000

Interest Payable

Unearned Service Revenue 15,020

Pooh, Capital 20,000

Pooh, Withdrawal 3,000

Service Revenue 1,580

Supplies Expense 2,680

Salaries Expense 1,200

52,600 52,600

Additional Information:

  • No interest has yet been paid on the note payable. Accrued interest at September 30 amounts to

P500.

  • Salaries earned by the office staff but not yet recorded or paid amounted to P670 by September

30.

  • Many clients are asked to make advance payment for legal services to be rendered in future

months. These advances are credited to the Unearned Service Revenue account once received.

During September, P3, 540 of these advances were earned

  • Office supplies on hand by September 30 amounted to P260.
  • The office equipment was purchased on September 15 and is being depreciated over an estimated

useful life of 5 years with P1, 000 residual value.

Instructions:

1. Prepare the adjusted entries for September 30.

2. Prepare the adjusted trial balance.

3. Prepare the income statement for September 2019.

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