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Required information E4-15 Recording Adjusting Entries and Preparing an Adjusted Trial Balance [LO 4-2, 4-3] [The following information applies to the questions displayed below. North Star prepared the following unadjusted trial balance at the end of its second year of operations ending December 31. Credit Debit $11,800 5,800 2,360 20,800 $ 1,120 1,120 Account Titles Cash Accounts Receivable Prepaid Rent Equipment Accumulated Depreciation Accounts Payable Income Tax Payable Common Stock Retained Earnings Sales Revenue Salaries and Wages Expense Utilities Expense Rent Expense Depreciation Expense Income Tax Expense Totals 24, 600 1,900 49,120 24,800 12.300 $77,860 $77,860 Other data not yet recorded at December 31: a. Rent expired during the year, $1,180. b. Depreciation expense for the year, $1,120. c. Utilities used and unpaid, $8,800. d. Income tax expense, $370. Required: 1. Indicate the accounting equation effects of each required adjustment. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.) Transcation Assets Liabilities Stockholders' Equity Required information Summarize the adjusting journal entries in T-accounts. After entering the beginning balances and computing the adjusted ending balances. Prepaid Rent Rent Expense Beg. Bal Beg. Bal. End. Bal. End. Bal. Accumulated Depreciation Depreciation Expense Beg Bal Beg Bal End Bal End, Bal Accounts Payable Utilities Expense Bog. Bal. Beg. Bal. End Bal End Bal Income Tax Payable Income Tax Expense Beg Bal Beg Bal End Bal 4. Compute the amount of net income using (a) the preliminary (unadjusted) numbers and (b) the final (adjusted) numbers. Had the adjusting entries not been recorded, would net income have been overstated or understated, and by what amount? Complete this question by entering your answers in the tabs below. Reg 4 Had the adjusting entries not been recorded, would net income have been overstated or understated, and by what amount? Not income by 4. Compute the amount of net income using (a) the preliminary (unadjusted numbers and (b) the final (adjusted numbers. Had the adjusting entries not been recorded, would net income have been overstated or understated, and by what amount? Complete this question by entering your answers in the tabs below. Req 4A Reg 48 Compute the amount of net income using (a) the preliminary (unadjusted) numbers, and (b) the final (adjusted) numbers. min () Adjusted Net Income

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