The unadjusted trial balance of Farmer Investment Advisers at December 31, 2024,follows:
Data Table
| Farmer Investment Advisers |
| Unadjusted Trial Balance |
| December 31, 2024 |
| | Balance |
| Account Title | Debit | Credit |
| Cash | $25,000 | |
| Accounts Receivable | 40,000 | |
| Office Supplies | 8,000 | |
| Equipment | 20,000 | |
| Accumulated Depreciation-Equipment | | $17,000 |
| Accounts Payable | | 17,000 |
| Salaries Payable | | 0 |
| Unearned Revenue | | 5,000 |
| Notes Payable (long-term) | | 17,000 |
| Farmer, Capital | | 14,000 |
| Farmer, Withdrawals | 27,000 | |
| Service Revenue | | 92,000 |
| Insurance Expense | 2,000 | |
| Salaries Expense | 31,000 | |
| Supplies Expense | 0 | |
| Interest Expense | 3,000 | |
| Rent Expense | 6,000 | |
| Depreciation Expense-Equipment | 0 | |
| Total | $162,000 | $162,000 |
Adjustment data at December 31, 2024:
a. Unearned Revenue earned during the year, $400.
b. Office Supplies on hand, $3,000.
c. Depreciation for the year,$2,000.
d. Accrued Salaries Expense, $4,000.
e. Accrued Service Revenue, $7,000.
Requirement 1. Prepare a worksheet for Farmer Investment Advisers at December 31, 2024. The unadjusted balances have been entered for you in the trial balance columns of the worksheet. Complete the worksheet one section at a time beginning with the Adjustments section. Enter the adjustments along with the adjustment letter references-(a), (b), (c), etc.into the columns as appropriate. In the following step, complete the Adjusted Trial Balance. Lastly, complete the worksheet by preparing the Income Statement and Balance Sheet columns. Be sure to calculate the total debils and credils in each step. i (Click the icon to view the abbreviations used.) ) Farmer Investment Advisers Worksheet December 31, 2024 , Adjusted Adjustments Trial Balance Debit Credit Debit Credit Income Balance Unadjusted Trial Balance Debit Credit Statement Sheet Acct. Title Debit Credit Debit Credit Cash 25,000 40,000 AR Office Supp 8,000 20,000 Equipment A/D-Equip AP 17,000 17,000 IC JL Salaries Pay Unearn. Rev. NIP (W) Farmer, Cap. Farmer, W/D 5,000 17,000 14,000 27,000 Service Rev. 92,000 Service Rev. 92,000 2,000 31,000 Ins. Exp. Salaries Exp. Supplies Exp. Interest Exp. Rent Exp. 3,000 6,000 Depr. Exp. 162,000 162,000 Total Net income or loss Requirement 2. Prepare the income statement, the statement of owner's equity, and the classified balance sheet in account format. Assume there were no contributions made by the owner during the year. Begin by preparing the income statement Review the Income Statement columns of the worksheet completed in Requirement 1. Farmer Investment Advisers Income Statement Year Ended December 31, 2024 Net Income (Loss) Prepare the statement of owner's equity. Assume that there were no contributions made by the owner during the year. Enter any increases in capital prior to the subtotal and any decreases to capital below the subtotal. (Exclude any zero-balance events for the period from the statement of owner's equity. Review the Balance Sheet columns of the worksheet completed in Requirement 1. Review the Balance Sheet columns of the worksheet completed in Requirement 1. Farmer Investment Advisers Statement of Owner's Equity Year Ended December 31, 2024 Farmer, Capital, January 1, 2024 Farmer, Capital, December 31, 2024 Prepare the classified balance sheet in account format on December 31, 2024. (If a box is not used in the balance sheet, leave the box empty; do not select a label or enter a zero. Abbreviations used: Depr.= Depreciation; Equip.=Equipment.) Review the Balance Sheet columns of the worksheet completed in Requirement 1. Review the Statement of Owner's Equity completed above. Farmer Investment Advisers Balance Sheet December 31, 2024 Assets Liabilities Less: Owner's Equity Requirement 3. Prepare closing entries. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Start by closing revenues. Review the Income Statement columns of the worksheet completed in Requirement 1. Date Accounts and Explanation Debit Credit Dec. 31 Clos. (1) Close expenses for the period. Review the Income Statement columns of the worksheet completed in Requirement 1. Date Accounts and Explanation Debit Credit Dec. 31 Clos. (2) Close Income Summary. Review the Income Statement columns of the worksheet completed in Requirement 1. Date Accounts and Explanation Debit Credit Dec. 31 Clos. (3) Close withdrawals. Review the Balance Sheet columns of the worksheet completed in Requirement 1. Date Accounts and Explanation Debit Credit Dec. 31 Clos. (4)
