[Rustam_vu]

ABC a private investing business called ABC Investigations. Some clients are required to pay in advance for the company’s services, while others are billed after the services have been rendered. Advance payments are credited to an account entitled unearned retainer fees, which represents unearned revenue. The business adjusts its accounts each month and closes its accounts at the end of each quarter. At March 31, the end of first quarter, the trial balance appeared as follows:

ABC INVESTIGATIONS
Trial Balance
March. 31.2007
Cash 17,150
Fees Receivables 37,800
Unexpired Insurance 1,600
Prepaid Rent 5,400
Office Supplies 1,050
Office Equipment 17,100
Accumulated depreciation: 5,700
Accounts Payable 3,900
Unearned Retainer Fees 24,000
ABC, Capital 45,300
ABC, Drawing 3,200
Fees Earned 33,320
Depreciation expense 570
Rent Expense 3,000
Office Supplies Expense 450
Insurance Expense 800
Telephone Expense 1,200
Travel Expense 3,400
Salaries Expense 19,500
112,220 112,220





Other Data:

a) The useful life of the office equipment was estimated at five years.
b) Fees of Rs.8, 400 were earned during the month from services performed for clients who had paid in advance.
c) Salaries earned by employees during the month but not yet recorded or paid amounted to Rs.1, 665.
d) On March 1, the business moved into a new office and paid the first three months’ rent in advance.
e) Investigative services rendered during the month but not yet collected or billed to clients amounted to Rs.3, 900.
f) Office supplies on hand March 31 amounted to Rs.700. Mark: 1
g) On January 1, Rs.2400 was paid as the premium for six months; liability insurance.

Instructions:
Prepare the adjusting entries required at March 31. (Use the straight-Line method for depreciation)

Determine the amount of net income to be reported in the company’s income statement for the quarter ended March 31, 2001.