Preparing a work sheet and the financial statements 1 2 Cash Bal. 15,000 Accumulated Depreciation Bal. 13,000 Note Payable, Long-Term Bal. 60,000 Service Revenue Bal. 182,000 Depreciation Expense The unadjusted T-accounts of Paladdin Investment Advisers, at Decem- ber 31, 2007, and the related year-end adjustment data follow. Equipment Bal. 99,000 Accounts Receivable Bal. 36,000 Accounts Payable Bal. 6,000 Bal. 6,000 Interest Expense Supplies Bal. 9,000 Salary Payable S. Paladdin, Capital Salary Expense Bal. $3,000 Bal. 36,000 Rent Expense Bal. 15,000 Unearned Service Revenue Bal. 5,000 S. Paladdin, Withdrawals Bal. 62,000 Supplies Expense Insurance Expense Bal. 7,000 Adjustment data at December 31, 2007: a. Unearned service revenue earned during the year, $1,000. b. Supplies on hand, $1,000. c. Depreciation for the year, $9,000. d. Accrued salary expense, $1,000. e. Accrued service revenue, $2,000. Requirements 1. Enter the account data in the Trial Balance columns of a work sheet, and complete the work sheet. Key each adjusting entry by the letter corresponding to the data given. List all the accounts, including those with zero balances. Leave a blank line under Service Revenue. (p. 198) 2. Prepare the income statement, the statement of owner's equity, and the classified balance sheet in account format. (p. 203) 3. Did Paladdin have a good or a bad year during 2007? Give the rea- son for your answer. (Challenge)