Error analysis (Learning Objective 2) 10–15 min.

The adjusting entries for the following adjustments were omitted at period-end:

a. Prepaid rent expired, $3,000.

b. Depreciation, $1,300.

c. Employee salaries owed for Monday through Wednesday of a five-day workweek,

$4,000.

d. Supplies used during the period, $800.

e. Unearned service revenue now earned, $4,200.

Requirement Compute the amount that net income for the year is overstated or understated for each omitted entry. Use the following format to help analyze the transactions.

Sample a., b., etc.

Transaction Overstated Overstated/Understated

$5,000 Amount AppendixLO1