At the end of the first three months of operation, Kubose Answering Service, Inc.'s trial balance appears as follows. Kubose 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:
- An inventory of office supplies reveals supplies on hand of $133.
- The Prepaid Rent account includes the rent for the first three months plus a deposit for April's rent.
- Depreciation on the equipment for the first three months is $208.
- The balance of the Unearned Answering Service Revenue account represents a 12-month service contract paid in advance on February 1.
- On March 31, accrued wages total $80.
- Federal income taxes for the three months are estimated to be $980.
| Kubose Answering Service, Inc. |
| Trial Balance |
| March 31, 2014 |
| Cash |
|
3,482 |
|
| Accounts Receivable |
|
4,236 |
|
| Office Supplies |
|
903 |
|
| Prepaid Rent |
|
800 |
|
| Equipment |
|
4,700 |
|
| Accounts Payable |
|
|
2,673 |
| Unearned Answering Service Revenue |
|
|
888 |
| Common Stock |
|
|
5,933 |
| Dividends |
|
2,130 |
|
| Answering Service Revenue |
|
|
9,002 |
| Wages Expense |
|
1,900 |
|
| Office Cleaning Expense |
|
345 |
|
|
| |
18,496 |
|
18,496 |
All adjustments affect one balance sheet account and one income statement account. For each of these situations, the accounts affected are shown below, you are required to show 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 following format (Enter all dollar amounts as positive numbers):
| |
Balance Sheet Account |
Amount of Adjustment
(+ or -) |
Balance after
Adjustment |
|
Income Statement Account |
Amount of Adjustment
(+ or -) |
Balance after
Adjustment |
| a. |
Office Supplies |
Select+-Item 1 |
|
mce_markernbsp; |
|
mce_markernbsp; |
|
Office Supplies Expense |
Select+-Item 4 |
|
mce_markernbsp; |
|
mce_markernbsp; |
| b. |
Prepaid Rent |
Select+-Item 7 |
|
|
|
|
|
Rent Expense |
Select+-Item 10 |
|
|
|
|
| c. |
Accumulated Depreciation-Equipment |
Select+-Item 13 |
|
|
|
|
|
Depreciation Expense-Equipment |
Select+-Item 16 |
|
|
|
|
| d. |
Unearned Answering Service Revenue |
Select+-Item 19 |
|
|
|
|
|
Answering Service Revenue |
Select+-Item 22 |
|
|
|
|
| e. |
Wages Payable |
Select+-Item 25 |
|
|
|
|
|
Wages Expense |
Select+-Item 28 |
|
|
|
|
| f. |
Income Taxes Payable |
Select+-Item 31 |
|
|
|
|
|
Income Taxes Expense |
Select+-Item 34 |