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On July 31, 20X1, after one month of operation, the general ledger of Michael Lee, CPA, contained the accounts and balances given below.

ADJUSTMENTS

On July 31, an inventory of the supplies showed that items costing $430 were on hand. On July 1, the firm paid $10,500 in advance for three months of rent. On July 1, the firm purchased a one-year insurance policy for $2,820. On July 1, the firm paid $500 for four months of advertising. The ads began running in July. On July 1, the firm purchased office furniture for $14,760. The furniture is expected to have a useful life of six years and a salvage value of $1,800. On July 1, the firm purchased office equipment for $7,250. The equipment is expected to have a useful life of five years and a salvage value of $1,850. On July 1, the firm issued a three-month, 6 percent note for $18,000. On July 1, the firm received a fee for accounting services of $7,200 in advance for a one-year period.

Required: Prepare a partial worksheet with the following sections: Trial Balance, Adjustments, and Adjusted Trial Balance. Use the data about the firms accounts and balances to complete the Trial Balance section. Enter the adjustments described above in the Adjustments section. Complete the Adjusted Trial Balance section.

Analyze: By what total amount were the expense accounts of the business adjusted?

\begin{tabular}{lrl} ACCOUNTS AND BALANCES & \\ Cash & 27,710 Debit \\ Accounts Receivable & 2,940 Debit \\ Supplies & 960 Debit \\ Prepaid Rent & 10,500 Debit \\ Prepaid Insurance & 2,820 Debit \\ Prepaid Advertising & 500 Debit \\ Furniture & 14,760 Debit \\ Accumulated Depreciation-Furniture & & \\ Equipment & 7,250 Debit \\ Accumulated Depreciation-Equipment & & \\ Notes Payable & 18,000 Credit \\ Accounts Payable & 4,200 Credit \\ Interest Payable & 7,200 Credit \\ Unearned Accounting Fees & 35,720 Credit \\ Michael Lee, Capital & 3,600 Debit \\ Michael Lee, Drawing & 10,600 Credit \\ Accounting Fees & 4,200 Debit \\ Salaries Expense & 270 Debit \\ Utilities Expense & 210 Debit \\ Telephone Expense & & \\ Supplies Expense & & \\ Rent Expense & & \\ Insurance Expense & & \\ Advertising Expense & & \\ Depreciation Expense-Furniture & \\ Depreciation Expense-Equipment & \\ Interest Expense & \\ & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multicolumn{7}{|c|}{ Michael Lee, CPA } \\ \hline \multicolumn{7}{|c|}{ Partial Worksheet } \\ \hline \multicolumn{7}{|c|}{ Month Ended July 31, 20X1 } \\ \hline \multirow{2}{*}{ Account Name } & \multicolumn{2}{|c|}{ Trial Balance } & \multicolumn{2}{|c|}{ Adjustments } & \multicolumn{2}{|c|}{ Adjusted Trial Balance } \\ \hline & Debit & Credit & Debit & Credit & Debit & Credit \\ \hline \multicolumn{7}{|l|}{ Cash } \\ \hline \multicolumn{7}{|l|}{ Accounts Receivable } \\ \hline \multicolumn{7}{|l|}{ Supplies } \\ \hline \multicolumn{7}{|l|}{ Prepaid Rent } \\ \hline \multicolumn{7}{|l|}{ Prepaid Insurance } \\ \hline \multicolumn{7}{|l|}{ Prepaid Advertising } \\ \hline \multicolumn{7}{|l|}{ Furniture } \\ \hline \multicolumn{7}{|c|}{ Accumulated Depreciation-Furniture } \\ \hline \multicolumn{7}{|l|}{ Equipment } \\ \hline \multicolumn{7}{|c|}{ Accumulated Depreciation-Equipment } \\ \hline \multicolumn{7}{|l|}{ Notes Payable } \\ \hline \multicolumn{7}{|l|}{ Accounts Payable } \\ \hline \multicolumn{7}{|l|}{ Interest Payable } \\ \hline Unearned Accounting Fees & & & & & & \\ \hline \end{tabular} Analyze: By what total amount were the expense accounts of the business adjusted? Complete this question by entering your answers in the tabs below. By what total amount were the expense accounts of the business adjusted? Note: Round your final answer to two decimal places

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