Complete the six-column table by entering adjustments that reflect the following information: a. As of December 31, 2005, employees had earned $900 of unpaid and unrecorded salaries. The next payday is January 4, at which time $1,600 of salaries will be paid. b. The cost of supplies still available at December 31, 2005, is $2,700. c. The notes payable requires an interest payment to be made every three months. The amount of unrecorded accrued interest at December 31, 2005, is $1,250. The next interest payment, at an amount of $1,500, is due on January 15, 2006. d. Analysis of the unearned member fees account shows $5,600 remaining unearned at December 31, 2005. e. In addition to the member fees included in the revenue account balance, the company has earned another $9,100 in unrecorded fees that will be collected on January 31, 2006. The company is also expected to collect $8,000 on that same day for new fees earned in January 2006. f. Depreciation expense for the year is $12,500. 2. Use the work sheet to enter the adjusting and closing entries; then journalize them. 3. Prepare the income statement and the statement of owner’s equity for the year ended June 30 and the classified balance sheet at June 30, 2005. Analysis Component 4. Analyze the following separate errors and describe how each would affect the 10-column work sheet. Explain whether the error is likely to be discovered in completing the work sheet and, if not, the effect of the error on the financial statements. a. Assume that the adjustment for supplies used consisted of a credit to Supplies for $3,200 and a debit for $3,200 to Supplies Expense. b. When the adjusted trial balance in the work sheet is completed, the $17,500 Cash balance is incorrectly entered in the Credit column. 166 Chapter 4 Completing the Accounting Cycle Check (3) Total assets, $120,250; current liabilities, $14,290; Net income, $39,300 Check (1) Adjusted trial balance totals, $224,000 Bullseye Ranges December 31,2005 Account Title Unadjusted Adjustments Adjusted Trial Balance Trial Balance DR CR DR CR DR CR Cash…………………………………..$13,000 Accounts receivable…………… 0 Supplies……………………………..$5,500 Equipment………………………$130,000 ACCUMULATED DEPRECIATION Equipment…………………………………………………$25,000 Interest payable………………………………………..0 Salaries payable………………………………………….0 Unearned member fees……………………………..$14,000 Notes payable……………………………………………..$50,000 T. Allen Capital……………………………………………..$58,250 T. Allen withdrawls………………$20,000 Member fees earned………………………………….$3,000 DEPRECIATION EXPENSES Equipment……………………………0 Salaries expense………………..$28,000 Interest expense……………….$3,750 Supplies expense………………0 Totals…………………………$200,250 $200,250