An accountant made the following adjustments at December 31, the end of the accounting period:
a. Prepaid insurance, beginning, $500. Payments for insurance during the period, $1,760. Prepaid insurance, ending, $990.
b. Interest revenue accrued, $1,530.
C.
Unearned service revenue, beginning, $1,000. Unearned service revenue, ending, $700.
d.
Depreciation, $4,500.
e.
Employees' salaries owed for three days of a five-day work week; weekly payroll, $19,900.
f.
Income before income tax, $24,000. Income tax rate is 25%.
Requirements
1. Journalize the adjusting entries.
2.
any understated amounts and totals.)
Suppose the adjustments were not made. Compute the overall overstatement or understatement of net income as a result of the omission of these adjustments.