Problem - Review the unadjusted trial balance below and prepare adjusting journal entries to record the various described items below.  Record in the space provided at the bottom of this spreadsheet.  After completing journal entries, complete the adjusted trial balance below.  Lastly complete the income statement, statement of retained earnings and balance sheet.

It is important to prepare your statements in the order listed because information flows from one statement to the next. The balance sheet must balance.  The accounting equation is Assets = Liabilities + Equity.

1. "Baltimore Corporation's equipment had an original life of 10 years, and the straight-line depreciation method is used. "As of January 1, the equipment was 2 years old.  The equipment will be worthless at the end of its useful life. "The total depreciation for the month should be $400.  (48,0000 divided by 120 months)

2. "As of the end of the month, Baltimore Corporation has provided services to customers for which the earnings process is complete. "Formal billings are normally sent out on the first day of each month for the prior month's work.  January's unbilled work is $20,000.

3. "Utilities used during January, for which bills will soon be forthcoming from providers, are estimated at $1,800."

4. "A review of supplies on hand at the end of the month revealed items costing $3,500."

5. "The $1,200 balance in prepaid insurance was for a 6-month policy running from January 1 to June 30.

6. "The unearned revenue was collected in December of 2014.  60% of that amount was actually earned in January, with the remainder to be earned in February.

7. "The loan accrues interest at 1% per month.  No interest was paid in January.

8. At month end, salaries of $2,620 have been earned but not paid.

Attachment:- Assignment.rar