At the end of first three months of operation, the trial balance of City Answering Service appears as shown below. Tim Bass, the owner of City Answering Service, has hired an accountant to prepare financial statements to determine how well the company is doing after three months. Upon examining the accounting records, the accountant finds the following items of interest:

a. An inventory of office supplies reveals supplies on hand of $150.

b. The Prepaid Rent account includes the rent for the first three months plus a deposit for April's rent.

c. Depreciation on the equipment for the first three months is $416.

d. The balance of the Unearned Answering Service Revenue account represents a 12-month service contract paid in advance on February 1.

e. On March 31, accrued wages total $105.

Required
All adjustments affect one balance sheet account and one income statement account. For each of the above situations, show the accounts affected, the amount of the adjustment (using a + or – to indicate an increase or decrease), and the balance of the account after the adjustment in the followingformat:

Transcribed Image Text:

City Answering Service Trlal Balance March 31, 2010 Cash Accounts Receivable Office Supplies Prepaid Rent Equipment Accounts Payable Unearned Answering Service Revenue T. Bass, Capital T. Bass. Withdrawals Answering Service Revenue Wages Expense Office Cleaning Expense S 3,582 4,236 800 4.700 2,673 5,933 2,100 9,102 1900 345 $18,596 $18,596 Balance Amount of Sheet Adjustment Balance After Statement Adjustment Balance After Account or- Adjustment Account orAdjustment Income Amount of