Q1: Presented below is the Trial Balance and Adjusted Trial Balance for Morning Jacket Company on December 31.

MORNING JACKET

Trial Balance

December 31

Before Adjustment After Adjustment

Dr. Cr. Dr. Cr.

Cash $ 2,000 $ 2,000

Accounts Receivable 2,800 3,800

Prepaid Rent 2,100 1,400

Supplies 1,200 650

Equipment 18,000 18,000

Accumulated depreciation

Equipment $ 1,300 $ 1,550

Accounts Payable 2,700 2,700

Notes Payable 10,000 10,000

Interest Payable 140

Salaries and Wages Payable 1,270

Unearned Service Revenue 4,460 3,960

Owners Capital ? ?

Owners Drawings 3,200 3,200

Service Revenue 8,000 9,500

Salaries and Wages Expense 3,860 5,130

Rent Expense 500 1,200

Supplies Expense 550

Depreciation Expense

Equipment 250

Interest Expense 140

Totals

Instructions

1. Owners capital equals 403,800 and create land account to retain the equality of the trial balance.
2. Prepare in journal form, with explanations, the adjusting entries that explain the changes in the balances from the trial balance to the adjusted trial balance.
3. Using the information from the adjusted trial balance, you are to prepare for the period ending December 31:
   1. income statement
   2. owners equity statement
   3. balance sheet