WAQAS1ACA ONLY

COMPREHENSIVE PROBLEM ALTERNATIVE P9

Determining Adjustments

At the end of the first three month of operation, Evergreen Repair, Inc.’s trial balance is as follows.

Evergreen Repair, Inc.

Trial Balance

March 31, 2014

------------------------------------------------------------------------------------------------------------------------------------------

Cash 7983

Accounts Receivable 5872

Office Supplies 970

Prepaid Rent 1500

Equipment 5200

Accounts Payable 2629

Unearned Repair Revenue 1146

Common Stock 5000

Retained Earnings 6314

Dividends 1800

Repair Revenue 12,236

Wages Expense 3580

Office Cleaning Expense 420

27,325 27,325

Evergreen has hired an accountant to prepare financial statements to determine how well the company is doing after the 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 $469.

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 $560.

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

e. On March 31, accrued wages total $168.

f. Federal income taxes for the three months are estimated to be $1250.

REQUIRED

All adjustments affect one balance sheet account and one income statement account. For each of these 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 following format.

Balance Amount of Balance Income Amount of Balance

Sheet Adjustment After Statement Adjustment After

Account (+ or -) Adjustment Account (+ or -) Adjustment