Terrific Temps fills temporary employment positions for local businesses. Some businesses pay in advance for services; others are billed after services have been performed. Unadjusted trial balance dated 31^st December, 2015 is attached. Adjusting entries are performed on a monthly basis. The following information is available to prepare necessary adjusting entries:

1.Accrued but unrecorded fees earned as of December 31, 2015.

2.Records show that $1,500 of cash receipts originally recorded as unearned fees had been earned as of December 31.

3.The company purchased a six month insurance policy on November 1, 2015.

4.On December 1, 2015, the company paid its rent through February 28, 2016.

5.Office supplies on hand at December 31 amounts to $450.

6.All equipment was purchased when the business first formed. The estimated life of the equipment at that time was 10 years.

7.On August 1, 2015, the company borrowed $12,000 by signing a six month, 6% note payable. The entire note, plus six months accrued interest, is due on February 1, 2016.

8.Accrued but unrecorded salaries at December 31 amount to $2,700.

9.Estimated income taxes expense for the entire year totals $16,000. Taxes are due in the first quarter of 2016.

Required:

a)Prepare necessary adjusting entries.

b)Prepare adjusted trial balance at December 31, 2015

c)Prepare income statement for the period ending December 31, 2015

d)Prepare balance sheet at December 31, 2015

e)Prepare necessary closing entries

f)Prepare after-closing trial balance at December 31, 2015

Terrific Temps

Unadjusted Trial Balance

Thursday, December 31, 2015

Debit

Credit

Cash

27,020

Accounts Receivable

59,200

Unexpired insurance

900

Prepaid rent

3,000

Office supplies

600

Equipment

60,000

Accumulated depreciation: equipment

29,500

Account payable

4,180

Notes payable

12,000

Interest payable

320

Unearned fees

6,000

Income tax payable

4,000

Unearned revenue

20,000

Retained earnings

49,000

Capital stock

25,000

Dividends

3,000

Fees earned

75,000

Travel expense

5,000

Insurance expense

2,980

Rent expense

9,900

Office supplies expense

780

Utilities expense

4,800

Depreciation expense: equipment

5,500

Salaries expense

30,000

Interest expense

320

Income Tax expense

12,000

225,000

225,000