Preparing a worksheet and financial statements, journalizing adjusting entries, and posting to ledger accounts. Paula Judge owns Judge Creative Designs. The trial balance of the firm for January 31, 2019, the first month of operations, is shown below. INSTRUCTIONS 1. Complete the worksheet for the month. 2. Prepare an 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. Use 3 for the journal page number. Use the following account numbers: Supplies, 121: Prepaid Advertising, 130; Prepaid Rent, 131: Accumulated Depreciation Equipment, 142; Supplies Expense, 517; Advertising Expense. 519; Rent Expense, 520: Depreciation Expense, 523. End-of-the-month adjustments must account for the following items: a. Supplies were purchased on January 1, 2019; inventory of supplies on January 31, 2019, is $1,600. b. The prepaid advertising contract was signed on January 1, 2019, and covers a four-month period. Cantu Corporation Worksheet Month Ended December 31, 2019 ADJUSTMENTS TRIAL BALANCE DEBIT CREDIT CREDIT ACCOUNT NAME Cash DEBIT 391 00 00 650 000 605 000 1020 000 42 50 000 (0) (0) 350 000 1170 000 (c) 85 000 650 000 54 50 000 Accounts Receivable Supplies Prepaid Advertising Equipment Accumwoted Depreciation--Equipment Accounts Payable Selena Contu, Capital Selena Contu, Drawing to Fees Income 11 Supplies Expense 12 Advertising Expense Depreciation Expense-Equipment 14 Salaries Expense 1 Unities Expense 4 10 000 57 7 5 000 fo) (6) (c) 35 00 00 170 000 8 5 000 890 000 140 000 118 7 5 000 16 Total 1187 5 000 6105000 Net Income 60 5 000 ta 19 c. Rent of $2.100 expired during the month. d. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of 10 years with no salvage value. Analyze: If the adjusting entries had not been made for the month, would net income be overstated or understated? c. Rent of $2,100 expired during the month. d. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of 10 years with no salvage value. Analyze: If the adjusting entries had not been made for the month, would net income be overstated or understated? Judge Creative Designs Worksheet (Partial) Month Ended January 31, 2019 ACCOUNT NAME TRIAL BALANCE DEBIT CREONT 36 50 000 1360 000 9 7 5 000 12140 000 2520 000 33 60 000 Cash 2. Accounts Receivable Supplies Prepaid Advertising s Prepaid Rent & Equipment , Accumulated Depreciation - Equipment Accounts Payable Poul Judge, Capital 10 Poul Judge Drawing 1 Fees Income 1 Advertising Expense Depreciation Expense-Equipment ** Rent Expense 15 Salories Expense 1 Supplies Expense 1. Unibes Expense 16 5 5 000 6100 000 800 000 7410 000 10 710 000 Totals 190.000 1516 5 000 151 65 000 INCOME STATEMENT BALANCE SHEET DEBIT CREDIT DEBIT CREDIT 3910.000 650 000 255 000 850.000 4250 000 4 ADJUSTED TRIAL BALANCE DEBIT CREDIT 3910000 650 000 215 5000 850 000 42 50 000 8 5 000 650 000 5450 000 410000 57 7 5 000 350 000 1 700 00 85000 890 000 114 00 00 119 60 000 1191 6 0 0 00 5 85 000 6 650 000 5450 000 7 410 000 57 7 5 000 10 11 12 13 350 000 170 000 8 5 000 890 000 1140 000 16 3 5 000 411 40.000 57 75 000 14 15 57 7 5 000 103 25 000 61 8 5 000 15 41 40 000 17 103 25 01 00 15 N 57 7 5 000 103 25 000 19