Problem 4.1 Adjusted trial balance Amber Nestor recently formed an art gallery where she allows artists to display their artwork for sale. Customers buy the artwork through the gallery, but payments go directly to the originating artist. The artists, in turn, pay Amber a 20% commission, which is the gallery's revenue. Following is Amber's trial balance after the first year of operation. This trial balance does not reflect the adjustments that are necessary, as described by the additional information below. Amber Nestor Art Gallery Trial Balance (unadjusted) Dec 31, 20X4 Debits Credits Cash s 18.400 $ Supplies 6.790 Display equipment 15.000 Loan payable 7.500 Capital stock 25.000 Revenues 48.590 Rent expense 11.000 Salaries expense 24.000 Interest expense 500 Utilities expense 5.400 Total 81.090 s 81.090 Consider the following information relevant to adjustments: 1. The Display equipment was purchased near the beginning of the year. It has a 3-year life span and no salvage value, and should be depreciated equally over its life span 2. Amber is still entitled to receive $17.900 of commissions for art recently sold before the year end. This revenue has not yet been recorded, but it is expected that the artists will soon be making payment 3. Supplies on hand ot year end were counted, and amount to $3,400, 4. The December rent of $1.000 has not yet been paid. a) Using the above information, prepare the necessary adjusting entries as of Dec 31, 20X4. GENERAL JOURNAL Date Accounts Debits Credits Dec 31, 20X4 Dec 31, 20X4 Dec 31, 20X4 Deo 31. 20X4 by Use T-accounts to determine the adjusted balances of the accounts that have changed in the adjustment process. (Tip: First copy the trial balance values into the T-accounts before posting your journal entries!) CASH REVENUES ACCOUNTS RECEIVABLE RENT EXPENSE SUPPLIES SALARIES EXPENSE EQUIPMENT INTEREST EXPENSE ACCUMULATED DEPRECIATION UTILITIES EXPENSE LOAN PAYABLE RENT PAYABLE CAPITAL STOCK - Use the new account balances to prepare the adjusted trial balance. Amber Nestor Art Gallery Adjusted Trial Balance Dec 31, 20X4 Debits Credits Cash s $ Supplies Display equipment Lon payable Rent payable Cupital stock Revenues Rent expense Salaries expense Interest expense Utilities expense Total $