On July 31, 2019, after one month of operation, the general ledger of Michael Domenici, Consultant, contained the accounts and balances given below. ACCOUNTS AND BALANCES
Cash $ 25,360 Dr.
Accounts Receivable 1,410 Dr.
Supplies 930 Dr.
Prepaid Rent 10,050 Dr.
Prepaid Insurance 2,040 Dr.
Prepaid Interest 388 Dr.
Furniture 14,397 Dr.
Accumulated Depreciation—Furniture
Equipment 6,995 Dr.
Accumulated Depreciation—Equipment
Notes Payable 17,400 Cr.
Accounts Payable 5,200 Cr.
Interest Payable
Unearned Consulting Fees 5,640 Cr.
Michael Domenici, Capital 31,680 Cr.
Michael Domenici, Drawing 2,700 Dr.
Consulting Fees 8,700 Cr.
Salaries Expense 3,900 Dr.
Utilities Expense 255 Dr.
Telephone Expense 195 Dr.
Supplies Expense
Rent Expense
Insurance Expense
Depreciation Expense—Furniture
Depreciation Expense—Equipment
Interest Expense
ADJUSTMENTS
On July 31, an inventory of the supplies showed that items costing $615 were on hand.
On July 1, the firm paid $10,050 in advance for six months of rent.
On July 1, the firm purchased a one-year insurance policy for $2,040.
On July 1, the firm paid $388 interest in advance on a four-month note that it issued to the bank.
On July 1, the firm purchased office furniture for $14,397. The furniture is expected to have a useful life of eight years and a salvage value of $1,725.
On July 1, the firm purchased office equipment for $6,995. The equipment is expected to have a useful life of five years and a salvage value of $1,775.
On July 1, the firm issued a three-month, 6 percent note for $9,200.
On July 1, the firm received a consulting fee of $5,640 in advance for a one-year period.
Required:
1. Prepare a partial worksheet with the following sections: Trial Balance, Adjustments, and Adjusted Trial Balance. Use the data about the firm’s accounts and balances to complete the Trial Balance section.
2. Enter the adjustments described above in the Adjustments section.
3. Complete the Adjusted Trial Balance section.
Analyze:
By what total amount were the expense accounts of the business adjusted?