INSTRUCTIONS

1. Prepare the necessary adjusting entries

2. Prepare both the Unadjusted and Adjusted Trial Balance

Determining Adjustments P 1.

At the end of the 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 Aprils 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. LO3 Required

City Answering Service

Trial Balance March 31, 2010

Cash $ 3,582

Accounts Receivable 4,236

Office Supplies 933

Prepaid Rent 800

Equipment 4,700

Accounts Payable $ 2,673

Unearned Answering Service Revenue 888

T. Bass, Capital 5,933

T. Bass, Withdrawals 2,100

Answering Service Revenue 9,102

Wages Expense 1,900

Office Cleaning Expense 345

$18,596 $18,596

www.ch Analythe events alone action for your one or un contrast ASSETS LAB COUNTY Cole C. .Com A. A Rocatie Payable - . Bal ESTSESES . Bal