The Global Graphics Company was organized on January 1, 1996, by Nancy Glover. At the end of the first 6 months of operations, the trial balance contained the following accounts:

Analysis reveals the following additional data:
1. The \(\$ 2,700\) balance in Supplies Expense represents supplies purchased in January. At June 30 , there was \(\$ 1,500\) of supplies on hand.
2. The note payable was issued on February 1. It is a \(12 \%, 6\)-month note.
3. The balance in Insurance Expense is the premium on a one-year policy, dated March 1, 1996 4. Consulting fees are credited to revenue when received. At June 30, consulting fees of \(\$ 1,000\) are unearned.
5. Graphic fees earned but unbilled at June 30 total \(\$ 2,000\).
6. Depreciation is \(\$ 2,000\) per year.
\section*{Instructions}

(a) Journalize the adjusting entries at June 30 (assume adjustments are recorded every 6 months).

(b) Prepare an adjusted trial balance.

(c) Prepare an income statement and a retained earnings statement for the 6 months ended June 30 and a balance sheet at June 30 .

Transcribed Image Text:

Debits Cash $ 9,500 Accounts Receivable 14,000 Credits Notes Payable Accounts Payable $ 17,000 9,000 Equipment 45,000 Common Stock 25,000 Insurance Expense 1,800 Graphic Fees Earned 52,100 Salaries Expense 30,000 Consulting Fees Earned 5,000 Supplies Expense 2,700 Advertising Expense 1,900 Rent Expense 1,500 Utilities Expense 1,700 $108,100 $108,100