Nancy Zarl began operations as a private investigator on January 1, 1996. The trial balance columns of the work sheet for Nancy Zarl Corp. at March 31 are as follows:

Other data:
1. Supplies on hand total \(\$ 750\).
2. Depreciation is \(\$ 400\) per quarter.
3. Interest accrued on six months note payable, issued January \(1, \$ 300\).
4. Insurance expires at the rate of \(\$ 150\) per month.
5. Fees earned but unbilled at March 31 total \(\$ 750\).

\section*{Instructions}

(a) Enter the trial balance on a work sheet and complete the work sheet.

(b) Prepare an income statement and retained earnings statement for the quarter and a classified balance sheet at March 31.

(c) Journalize the adjusting entries from the adjustments columns of the work sheet.

(d) Journalize the closing entries from the financial statement columns of the work sheet.

Transcribed Image Text:

NANCY ZARL CORP. Work Sheet For the Quarter Ended March 31, 1996 Trial Balance Account Titles Dr. Cr. Cash $12,400 Accounts Receivable 5,620 Supplies 1,050 Prepaid Insurance 2,400 Equipment 30,000 Notes Payable $10,000 Accounts Payable 12,350 Common Stock 20,000 Dividends 600 Fees Earned 13,620 Salaries Expense 1,200 Travel Expense 1,300 Rent Expense 1,200 Miscellaneous Expense 200 $55,970 $55,970