Hello, could you please help me with a continuation of this question. I need to figure out if the assets, liabilities, and equity were overstated or understated.

USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (5) QUESTIONS:

Magic Cleaning Services has a fiscal year end of December 31st.It is in its first year of operations.As of December 31, Magic has the following unadjusted trial balance:

AccountDebitCreditCash$ 430,900Accounts Receivable$158,000Supplies$111,000Equipment$120,000Accounts Payable$45,900Unearned Service Revenue$ 113,600Common Stock$ 100,000Retained Earnings-0-Service Revenue$ 649,200Wage Expense$48,600Rent Expense$18,000Utilities Expense$6,200Administrative Expense$16,000___________TOTALS$ 908,700$ 908,700

In addition, Magic has not yet adjusted for the following:

1.The equipment was purchased on March 1 of the current year.It has a 10-year life, 10% salvage value and Magic uses the double declining balance method for depreciation.Magic records depreciation to the nearest full month.

2.On March 1, Magic prepaid $18,000 for 12 months of rent on an office/warehouse.The original entry was recorded as Rent Expense.

3.By December 31st, 60% of the services related to the Unearned Revenues had been performed.

4.Wages of $5,700 should be accrued and are scheduled to be paid on January 2.

5.Supplies of $33,000 were still on hand at year end.

6.Based on industry averages, it is estimated that 3% of the accounts receivable will prove tobe uncollectible.

Required:

To record AJE #2, Magic should do which of the following to record the correct adjustment:

sing the information presented for Magic Cleaning Services,IFnoneofthe (6)adjusting journal entries had been recorded,determine the effect on Total Assets.

ASSETSLIABILITIESEQUITY[BLANK_A]

(*NOTE:When recording your answer,use O for Overstated,U for Understated, or NE for No Effect.Do not space between your O/U/NE and the dollar amount of the error.Example:If your answer for the effect on Assets is Understated by $10,500, enter your answer as U10500.Do not use dollar signs or commas when recording your answer.)

Using the information presented for Magic Cleaning Services,IFnoneofthe (6)adjusting journal entries had been recorded,determine the effect on Total Liabilities.

ASSETSLIABILITIESEQUITY[Blank_B]

(*NOTE:When recording your answer,use O for Overstated,U for Understated, or NE for No Effect.Do not space between your O/U/NE and the dollar amount of the error.Example:If your answer for the effect on Assets is Understated by $10,500, enter your answer as U10500.Do not use dollar signs or commas when recording your answer.)

Using the information presented for Magic Cleaning Services,IFnoneofthe (6)adjusting journal entries had been recorded,determine the effect on Total EQUITY.

ASSETSLIABILITIESEQUITY[BLANK_C]

(*NOTE:When recording your answer,use O for Overstated,U for Understated, or NE for No Effect.Do not space between your O/U/NE and the dollar amount of the error.Example:If your answer for the effect on Assets is Understated by $10,500, enter your answer as U10500.Do not use dollar signs or commas when recording your answer.)