Use the following transactions to create transactions for a service business of your choice:

Al Ain Services Company had the following transactions for January 2020.

January 1 The owner invested in the company cash $70,000 and Equipment $25,000.

January 2 The company purchased office supplies for $4,200, on account

January 5 Paid $600 for an insurance covering the full year

January 7 Provided a service to a client and received $27,500 cash.

January 9 The company borrowed $20,000 cash from the bank. Annual interest is 12% .

January 12 Received $15,000 cash in advance from Fayda Company in payment for a service to be completed within the 3 months.

January 15 The company purchased equipment for $60,000 and paid $12,000 cash. The remaining amount was on account.

January 20 Owner withdrew $5,500 cash from the company for personal use.

January 31 The company paid $ 2,800 cash for advertising in a local news paper.

I. Required:

A. Prepare general journal entries for the month. [20 Marks]

B. Post entries to the Ledger [10 marks]

C. Prepare Trial balance [10 Marks]

Following additional information was provided at the end of January 2019.

1. The insurance expense for January was not recorded.

2. The equipment has a useful life of 10 years. Record depreciation expense for January.

3. On January 31, physical count found that supplies of $1,300 were in hand.

4. $5,000 worth of services was provided to Fayda Company during January

5 The interest on note payable for $150 has not yet been paid.

6. Wages for the last 2 days of January was unpaid, weekly wages for 5-days a week is $15,000

II. Required

Prepare adjusting entries for the above information and prepare an adjusted Trial Balance.

[30 Marks]

III. Required

Prepare the following financial statements based from the above adjusted trial balance:

1. Income statement [10 Marks]
2. Statement of Owners Equity [5 Marks]
3. Classified Balance sheet [15 Marks]