SOLO LTD Trial balance as at 30 June 2016

No. Account name Debit Credit

100 Cash 7750

104 Accounts Receivable 6000

112 Prepaid Insurance 2400

113 Supplies 2000

130 Office Equipment 15000

200 Accounts Payable 4500

213 Service Revenue Received in Advance 4000

300 Share Capital 21750

400 Service Revenue 7900

500 Salaries Expense 4000

510 Rent Expense 1000

38150 38150

In addition to those accounts listed on the trial balance, the chart of accounts for Solo Ltd also contains the following accounts: 131 Accumulated DepreciationOffice Equipment, 218 Electricity Payable, 215 Salaries Payable, 520 Depreciation Expense, 515 Insurance Expense, 530 Electricity Expense, and 505 Supplies Expense.

Other data:

1. Supplies on hand at 30 June total$1300.
2. An electricity bill for$150 has not been recorded and will not be paid until next
3. month.
4. The insurance policy is for a year.
5. Services were performed during the period in relation to$2500 of Revenue Received
6. in Advance.
7. Salaries of$1500 are owed at 30 June.
8. The office equipment has a 5-year life with no resale value and is being depreciated
9. at$250 per month for 60 months.
10. Invoices representing$3000 of services performed during the month have not been
11. recorded as of 30 June.

Required

1. (a)Prepare the adjusting entries for the month of June.
2. (b)Using T accounts, enter the totals from the trial balance as beginning account
3. balances and then post the adjusting entries to the ledger accounts.
4. (c)Prepare n adjusted trial balance as at 30 June 2016.
5. (d)Calculate the profit for the month
6. (e)Discuss the impact on profit for the current period and year and future years if the
7. equipment was depreciated over 2 years instead of 5 years and yet the business used the equipment for 5 years.