Berry Corporation prepared the following preliminary trial balance. The trial balance and other information was evaluated by Delton Wiser, CPA. Delton has returned a list of proposed adjustments that are necessary to facilitate preparation of correct financial statements for the year ending December 31, 20X3.

Delton discovered that 40% of the unearned revenue appearing in the trial balance had actually been earned as of the end of the year.
A physical count of supplies on hand revealed a year-end balance of only \($3\),000.
Unpaid and unrecorded invoices for utilities for December amounted to \($1\),500.
The last payday was December 26. Employees are owed an additional \($3\),900 that has not been recorded.
Additional depreciation of \($3\),100 needs to be recorded.

(a) Prepare journal entries relating to the adjustments.

(b) Prepare an adjusted trial balance.

(c) Prepare an income statement and statement of retained earnings for 20X3, and a classified balance sheet as of the end of the year.

(d) Berry's bookkeeper argued with Delton that there was no need to record the adjustments since they have no "net" effect on income. Evaluate whether this observation is true of false, and comment on the appropriateness of this logic.

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BERRY CORPORATION Trial Balance December 31, 20X3 Debits Credits Cash Accounts receivable Supplies $ 30,540 45,000 7,000 Equipment Accumulated depreciation 244,500 $ 46,500 Accounts payable 12,700 Unearned revenue 31,250 Notes payable 80,000 Capital stock 100,000 Retained earnings, Jan. 1 63,200 Dividends 12,000 Revenues 289,800 Wages expense 214,600 Utilities expense 8,700 Selling expense 41,610 Depreciation expense 12,000 Interest expense 7,500 $623,450 $623,450