Problem #3: On July 1, Grey Company was established. The T-Accounts (below) provide the balances in each account as of July 31 but prior to adjusting entries. Following is information necessary to adjust the accounts for accruals and deferrals: 1. Supplies on hand at July 31 total $720. 2. A utility bill for $180 has not been recorded and will be paid next month. 3. The insurance policy is for a year. 4. Services were performed for $4,100 of unearned service revenue by the end of the month. 5. Salaries of $1,250 are accrued at July 31. 6. The equipment has a 5-year life with no salvage value and is being depreciated at $250 per month for 60 months. 7. Invoices representing $3,900 of services performed during the month have not been recorded as of July 31. Required: a. Prepare the adjusting entries for the month of July. b. Post the adjusting entries to the general ledger (1.e., T-Accounts). C. Prepare an Income Statement, Statement of Shareholders' Equity, and Balance Sheet for July 31. Accounts Debit Credit 1 2 3 4 5 6 7 Cash 6,850 Accounts Res'ble 7,000 Supplies 2.000 Prepaid losuc 2,880 Equipment 15,000 Acauto. Reprec. Salaries Payable Accounts Payable 4,230 Uneamed Revenue 5,200 Common Stock 22,000 Reprec. Expense Service Revenue 8,300 Salaries Expense 4,000 Rent Expense 2,000 Insurance Expense Utilities Expense Supplies Expense Grey Company Income Statement For the Year Ended July 31 Service revenue Operating expenses. Net income.... Grey Company Statement of Retained Earnings For the Year Ended July 31 $ Beginning balance, July 1 Net income Dividends Ending balance, July 31 Grey Company Balance Sheet As of July 31 Assets Liabilities and Shareholders' Equity Cash Accounts receivable Accounts payable......... Salaries payable Unearned revenue. Common stock. Supplies Prepaid insurance Office equipment. Accum. depreciation.. Total assets Retained earnings........... Total liabilities and shareholders' equity