Paula Judge owns Judge Creative Designs. The trial balance of the firm for January 31, 2019, the first month of operations, is shown below.

End-of-the-month adjustments must account for the following items:

1. Supplies were purchased on January 1, 2019; inventory of supplies on January 31, 2019, is $650.
2. The prepaid advertising contract was signed on January 1, 2019, and covers a four-month period.
3. Rent of $1,150 expired during the month.
4. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of 10 years with no salvage value.

Required:

1. Complete the worksheet for the month.
2. Prepare a income statement, statement of owner's equity, and balance sheet. No additional investments were made by the owner during the month.
3. Journalize and post the adjusting entries.

Analyze

If the adjusting entries had not been made for the month, would net income be overstated or understated?

Reg 1 Reg 2 Inc Req 2 Start of Req 2 Bal Req 3 Gen Stimt OE Sheet Journal Req 3 Ledgers Analyze Prepare an income statement. JUDGE CREATIVE DESIGNS Income Statement Month Ended January 31, 2019 Revenue Expenses Total expenses S Reg 1 Reg 2 Inc Req 2 Stimt of Req 2 Bal Reg 3 Gen Stimt OE Sheet Journal Req 3 Ledgers Analyze Post the adjusting entries. Supplies Account No. 121 Prepaid Advertising Account No. 130 Date Debit Credit Balance Date Debit Credit Balance Jan 1. 2019 Jan 01, 2019 Jan 31, 2019 Jan 31, 2019 Prepaid Rent Account No. 131 Accumulated Depreciation- Equipment Account No. 142 Date Debit Credit Balance Date Debit Credit Balance Jan 1. 2019 Jan 31, 2019 Jan 31, 2019 Supplies Expense Account No.517 Advertising Expense Account No. 519 Date Debit Credit Balance Date Debit Credit Balance Jan 31. 2019 Jan 31. 2019 Rent Expense Account No. 520 Depreciation Expense- Equipment Account No. 523 Date Debit Credit Balance Date Debit Credit Balance Jan 31, 2019 Jan 31, 2019 3. Joumalize and post the adjusting entries. Analyze If the adjusting entries had not been made for the month, would net income be overstated or understated? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Inc Req 2 Stmt of Reg 2 Bal Reg 3 Gen Somt OE Sheet Journal Req 3 Ledgers Analyze Prepare a statement of owner's equity. JUDGE CREATIVE DESIGNS Statement of Owner's Equity Month Ended January 31, 2019 nces 0 S