E3-6 Zaragoza Company accumulates the following adjustment data at December 31.

1. Services performed but not recorded total $1,000.

2. Supplies of $300 have been used.
3. Utility expenses of $225 are unpaid.
4. Services related to unearned service revenue of $260 were performed.
5. Salaries of $800 are unpaid.
6. Prepaid insurance totaling $350 has expired.
Instructions
For each of the above items indicate the following.
(a) The type of adjustment (prepaid expense, unearned revenue, accrued revenue, or
accrued expense).
(b) The status of accounts before adjustment (overstatement or understatement).

1 Accruel Revenue Assets understated and Revenue understated

2 Prepaid Expense Assets overstated and Expense understated
3 Accruel Expense Assets understated and Expense understated
4 Unearned Revenue Assets overstated and Revenue understated
5 Accruel Expense Assets understated and Expense understated
6 Prepaid Expense Assets overstated and Expense understated
Prepaid Expense
Unearned Revenue
Accruel Revenue
Accruel Expense
Account titles are
,, , ,
,, , , ,,
, and.
Dr
Accumulated Depreciation—Equipment 400
Depreciation Expense
Service Revenue
Accounts Receivable 875
Prepaid Insurance
Insurance Expense 2000
Interest Expense 500
Interest Payable
Supplies 1200
Supplies Expense
Utilities Expense 650
Utilities Payable
Cr

400
875

2000

500

1200

650
 Adjusting entries Journal
Dr Cr Date Account
Unearned Service Revenue 1150 10 Supply
Service Revenue 1150 Cash
Salaries and Wages Expense 1200 14 Cash
Salaries and Wages Payable 1200 Service Revenue
Supplies Expense 800 15 Salaries and Wages Expense
Supplies 800 Cash
Account Receivable 500 20 Cash
Service Revenue 500 Unearned Service Revenue
ournal
Dr Cr
650
650
2000
2000
1200
1200
1000
1000
Account Title Trial Balance Adjustment Adjusted Trial Balance
Dr Cr Dr Cr Dr
Accounts Receivable 25000 9000 34,000
Prepaid Insurance 26,000 6000 20,000
Supplies 7,000 4500 2500
Accumulated Depreciation—Equipment 12,000 10000
Salaries and Wages Payable 5600
Service Revenue 88,000 9000
Insurance Expense 6000 6000
Depreciation Expense 10000 10,000
Supplies Expense 4500 4,500
Salaries and Wages Expense 43400 5600 49,000
Adjusted Trial Balance
Cr

2000
5,600
97,000
Account Title Adjusted Trial Balance Income Statement Balance Sheet
Dr Cr Dr Cr Dr Cr
Cash 10,000 10,000
Accounts Receivable 7,840 7,840
Prepaid Rent 2,280 2,280
Equipment 23,050 23,050
Accumulated Depreciation—Equip. 4,900 4,900
Notes Payable 5,700 5,700
Accounts Payable 4,920 4,920
Owner’s Capital 27,960 27,960
Owner’s Drawings 3,650 3,650
Service Revenue 15,590 15,590
Salaries and Wages Expense 10,840 10,840
Rent Expense 760 760
Depreciation Expense 650 650
Interest Expense 57 57
Interest Payable 57 57
Totals 59,127 59,127 12,307 15,590 46,820 43537
Net income 3,283 3,283