Zaragoza Company accumulates the following adjustment data at December 31.

1.		Supplies of $300 have been used.
2.		Salaries of $800 are unpaid.
3.		Prepaid insurance totaling $350 has expired.

For each of the above items do the following.

Indicate the status of accounts before adjustment (overstatement or understatement). Item Adjusting Entry Accounts before Adjustment 1. Revenues Understated Assets Understated Expenses Overstated Liabilities Understated Assets Overstated Expenses Understated Liabilities Overstated Revenues Overstated 2. 3.