Shayla Green owns Creative Designs. The trial balance of the firm for January 31, 20X1, the first month of operations, is shown below. End-of-the-month adjustments must account for the following items:

1. Supplies were purchased on January 1, 20X1; inventory of supplies on January 31, 20X1, is $3,200.
2. The prepaid advertising contract was signed on January 1, 20X1, and covers a four-month period.
3. Rent of $4,200 expired during the month.
4. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of 10 years with no salvage value.

Required:

1. Complete the worksheet for the month.
2. Prepare an income statement, statement of owners equity, and balance sheet. No additional investments were made by the owner during the month.
3. Journalize and post the adjusting entries.

Analyze:

If the adjusting entries had not been made for the month, by what amount would net income be overstated or understated?

Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Inc Stmt Req 2 Stmt of OE Reg 2 Bai Sheet Reg 3 Gen Journal Reg 3 Ledgers Analyze Complete the worksheet for the month. CREATIVE DESIGNS Worksheet Month Ended January 31, 20X1 Adjustments Adjusted Trial Balance Debit Debit Credit Account Name Credit Income Statement Debit Credit Balance Sheet Debit Credit Cash Trial Balance Debit Credit $ 73,000 27,200 19,500 24,800 50,400 67,200 33,100 122,000 Accounts receivable Supplies Prepaid advertising aan Prepaid rent Equipment Accumulated depreciation-Equipment Accounts payable Shayla Green, Capital Shayla Green, Drawing Fees income Advertising expense Depreciation expense-Equipment Rent expense Salaries expense Supplies expense Utilities expense Sub-totals 16,000 148.2001 21,400 3,800 303,300 $ $ 303,300 Totals Red Reg 2 Inc Stmt>