At the end of the first three months of operation

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

Evergreen 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 $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 $1,250.

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 1 or 2 to
indicate an increase or decrease), and the balance of the account after the adjustment in the
following format:

At the end of the first three months of operation

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