Alpha Graphics Company

(a) Journalize the adjusting entries at June 30. (Assume adjustments are recorded every 6 months.):
No Account
1 Supplies
Expense Supplies
2 Interest Expense
Interest Payable
3 Prepaid Insurance
Insurance Expense
4 Unearned Revenue
Service Revenue
5 Depreciation Expense
Accumulated Depreciation
Debit Credit
$ 680
$ 680
$ 750
$ 750
$ 1,920
$ 1,920
$ 1,100
$ 1,100
$ 1,125
$ 1,125

TOTAL $ 5,575 $ 5,575

(b) Adjusted trial balance:

Account Debit Credit
Cash                             $ 8,400
Accounts Receivable     $ 14,000
Equipment                     $ 45,000
Insurance Expense           $ 960
Prepaid Insurance         $ 1,920
Salaries Expense         $ 30,000
Supplies Expense         $ 3,220
Supplies                       $ 680
Advertising Expense     $ 1,900
Rent Expense                 $ 1,500
Utilities Expense           $ 1,700
Notes Payable                             $ 20,000
Interest Expense             $ 750
Interest Payable                                     $ 750
Depreciation Expense   $ 1,125
Accumulated Depreciation               $ 1,125
Accounts Payable                               $ 9,000
Share Capital-Ordinary $ 22,000
Service Revenue                           $ 58,280
Total                         $ 111,155 $ 111,155

(c.1) Income statement for the 6 months ended June 30:

Alpha Graphics Company
Income Statement
For the 6-Months Ended June 30, 2014
Revenues: Amount Amount
Service Revenue $ 58,280
Total Revenue                             $ 58,280
Less Expenses:
Insurance Expense           $ 960
Salaries Expense         $ 30,000
Supplies Expense           $ 3,220
Advertising Expense       $ 1,900
Rent Expense                 $ 1,500
Utilities Expense             $ 1,700
Interest Expense             $ 750
Depreciation Expense   $ 1,125
Total Expenses $ 41,155
Net Income                                     $ 16,025

(c.2) Owner's equity statement for the 6 months ended June 30:
Alpha Graphics Company
Owner's Equity Statement
For the 6-Months Ended June 30, 2014

Owner's Capital, January 1     $ 22,000

Add: Net Income $ 16,025
Owner's Capital, June 30     $ 38,025

(c.3) Balance sheet at June 30:

Alpha Graphics Company
Balance Sheet
For the 6-Months Ended June 30, 2014
Assets: Amount Amount
Cash                                               $ 8,400
Accounts Receivable                       $ 14,000
Prepaid Insurance                       $ 1,920
Supplies                                             $ 680
Equipment                                       $ 45,000
Less: Accumulated Depreciation -1,125 $ 43,875
Total Assets                                 $ 68,875

Liabilities + Equity:
Liabilities
Notes Payable                             $ 20,000
Interest Payable                                   $ 750
Accounts Payable                             $ 9,000
Unearned Revenue $ 1,100
Total Liabilities $ 30,850
Equity
Owner's capital, June 30                    $ 38,025
Total Liabilities + Equity             $ 68,875