Overall overstatement or understatement of net income

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Reference no: EM13823041

An Accountant made the following adjustment at December 31, the end of the accounting period:

a. Prepaid insurance , beginning , $600. Payments for insurance during the period  $2,400. Prepaid insurance ending $700

b. Interest revenue accrued $2,600

c. Unearned service revenue beginning $1,700. Unearned service revenue, ending $500

d. Depreciation, $5,800

e. Employee's salaries owed for two days of a five day work week; weekly payroll, $20,000

f. Income before income tax $21,000. Income tax rate is 35%

Requirements

1. Journalized the adjusting entries

2. Suppose the adjustment were not made. Compute the overall overstatement or understatement of net income as a result of the omission of their adjustments.

Reference no: EM13823041

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