TASKS (100 points) Powerjob Inc. provides employment consulting services. The company adjusts its accounts monthly but performs closing entries annually on December 31. The firm's unadjusted trial balance dated December 31, 2020 is shown below. Other data: 1. Accrued but unrecorded and uncollected consulting fee earned at December 31 totals: $40'000. 2. The company determined that $20'000 of previously unearned consulting fees had been earned at December 31. 3. Office supplies on hand at December 31 total $600 4. The company purchased all of its equipment when it first began business. At that time, the estimated useful life of the equipment was eight years. 5. The company prepaid its nine-month rent agreement on September 1, 2020. 6. The company prepaid its six-month insurance policy on November 1, 2020 7. Accrued but unpaid salaries total $30'000 at December 31,2020. 8. On November 1, 2020, the company borrowed $60'000 by signing a five-month, 4 percent note payable. The entire amount, plus interest, is due March 31, 2021. PowerJob Inc. UNADJUSTED TRIAL BALANCE DECEMBER 31, 2020 Account Debit Credit Cash $276'500 Accounts receivable $90'000 Office supplies $800 $3'600 $1'500 $72'000 $24'000 Prepaid rent Unexpired insurance Office equipment Accumulated depreciation : office equipment Accounts payable Notes payable (due 3/31/21) Interest payable Income taxes payable Dividends payable Unearned consulting fees Capital stock Retained earnings Dividends Consulting fees earned Rent expense Insurance expense Office supplies expense Depreciation expense : office equipment Salaries expense Utilities expense Interest expense Income taxes expense Totals $4'000 $60'000 $600 $9'000 $3'000 $22'000 $200'000 $40'000 $3'000 $500'000 $14700 $2'200 $4'500 $11'000 $330'000 $4'800 $3'000 $45'000 $862'600 $862'600 Instructions: a. Prepare the necessary adjusting journal entries on December 31, 2020. Also prepare an adjusted trial balance dated December 31, 2020 (30 points). 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, 2020. Also prepare the company's balance sheet dated December 31, 2020 (30 points). Compute the company's average monthly insurance expense for January through December 2020 (5 points). d. Compute the company's average monthly rent expense for January through June 2020 (5 points). e. If the company purchased all of its office equipment when it first incorporated, for how long has it been in business as of December 31, 2020? (10 points). f. Using the financial statements prepared in part b., evaluate the company's (i) profitability and (ii) liquidity. (20 points). C
