| debits | credits |
| cash | 37,500 | |
| accounts receivable | 12,410 | |
| prepaid insurance | 2,400 | |
| supplies | 7,113 | |
| equipment | 35,000 | |
| accumulated depreciation | | 10,000 |
| accounts payable | | 7,569 |
| unearned revenue | | 8,500 |
| loan payable | | 15,000 |
| capital stock | | 24,000 |
| retained earnings, jan 1. | | 15,457 |
| revenues | | 43,995 |
| salary expense | 12,098 | |
| rent expense | 13,000 | |
| office expense | 2,500 | |
| dividends | 2,500 | |
| 124,521 | 124,521 |
a) Asher Corporation's equipment had an originallife of 140 months, and the straight-line depreciation method isused. As of January 1, the equipment was 40 months old. Theequipment will be worthless at the end of its useful life.
b) As of the end of the month, Asher Corporation hasprovided services to customers for which the earnings process iscomplete. Formal billings are normally sent out on the first day ofeach month for the prior month's work. January's unbilled work is$25,000.
c) Utilities used during January, for which bills willsoon be forthcoming from providers, are estimated at $1,500.
d) A review of supplies on hand at the end of the monthrevealed items costing $3,500.
e) The $2,400 balance in prepaid insurance was for a6-month policy running from January 1 to June 30.
f) The unearned revenue was collected in December of20X7. Sixty percent of that amount was actually earned in Januarywith the remainder to be earned in February.
g) The loan accrues interest at 1% per month. Nointerest was paid in January.
