Transaction Analysis and Adjustments Dole Carpet Cleaners ended its first month of operations on June 30. Monthly financial statements will be prepared. The unadjusted account balances are as follows: DOLE CARPET CLEANERS Unadjusted Balances June 30 Cash Accounts receivable $1,180 450 Prepaid rent 3,100 Supplies 2,520 Equipment 4,440 Accounts payable 760 Common stock 2,500 Retained earnings (June 1) 5,000 Dividends Service fees earned Wages expense 200 4,650 1,020 The following information is also available: 1. The balance in Prepaid Rent was the amount paid on June 1 for the first 4 months' rent. 2. Supplies on hand at June 30 were $820. 3. The equipment, purchased June 1, has an estimated life of 5 years. 4. Unpaid wages at June 30 were $210. 5. Utility services used during June were estimated at $300. A bill is expected early in July. 6. Fees earned for services performed but not yet billed on June 30 were $380. The firm uses the account Fees Receivable to reflect amounts due but not yet billed. a. Determine the financial statement effect of the adjustments needed at June 30 using the Transaction Analysis Template. b. Prepare the income statement for the month of June and balance sheet as of June 30. Transaction Analysis Template Income Statement Balance Sheet TIP: Enter amounts that reduce the category as negative numbers. Balance Sheet Stockholders' Transaction Assets = Liabilities + Equity Revenue Expenses Income Statement Net Income Unadj. Bal. + 1. Rent adj = 2. Supplies adj + = + = 3. Depreciation adj = + = 4. Wages adj = + 5. Utilities adj 8. Fees earned adj End. Bal. 0 || = + = 0 + 0 0 0 = 0 Balance Sheet Transaction Analysis Template Income Statement TIP: Expenses can be entered in any order. Dole Carpet Cleaners Income Statement For the month of June Revenues Expenses > > $ Transaction Analysis Template Income Statement Balance Sheet TIP: Refer to Exhibit 3-3 for help with the order of presentation. Enter amounts that reduce totals as negative numbers. Dole Carpet Cleaners Balance Sheet June 30 Assets Fees receivable $ Liabilities Utilities payable Stockholders' Equity $760 Supplies Accumulated depreciation Total assets $ 0 Total liabilities and stockholders' equity $ 760