Question 3: Silver Lining, Inc., provides investment advisory services. The company adjusts its accounts monthly. The firm's unadjusted trial balance dated December 31, 2011, is shown on the following page. Silver Lining, Inc. Unadjusted Trial Balance December 31, 2011 Cash. Accounts receivable. Office supplies.. Prepaid rent... Debit Credit $ 42,835 2,000 205 1,200 Unexpired insurance Office equipment.. Accumulated depreciation: office equipment. Accounts payable... Interest payable... 270 54,000 $35,250 1,400 360 Income taxes payable 1,750 Notes payable... Uneamed consulting services revenue 9,000 3,500 Capital stock. 30,000 Retained earnings.. 8,000 Dividends.... 1,000 Consulting services revenue 60,000 Office supplies expense 605 Depreciation expense: office equipment. 8,250 Rent expense 3,525 Insurance expense. 1,010 Salaries expense. 27,100 Interest expense 360 6,900 Income taxes expense Totals... Other Data $149,260 $149,260 1. Accrued but unrecorded and uncollected consulting services revenue totals $1,500 at December 31, 2011. 2. The company determined that $2,500 of previously unearned consulting services revenue had been earned at December 31, 2011. 3. Office supplies on hand at December 31 total $110. Page 4 of 5 4. The company purchased all of its equipment when it first began business. At that time, the estimated useful life of the equipment was six years (72 months). 5. The company prepaid rent of $600 expired during the month. 6. Insurance of $270 expired during the month. Instructions a. Prepare the necessary adjusting journal entries on December 31, 2011. Prepare also an adjusted trial balance dated December 31, 2011. b. From the adjusted trial balance prepared in part a, prepare an income statement and statement of retained earnings for the year ended December 31, 2011. Also prepare the company's balance sheet dated December 31, 2011.