Reconstruction of Adjusting Entries from Unadjusted and Adjusted Trial Balances Following are the unadjusted and adjusted trial balances for Power Corp. on May 31, 2008:

Required 1. Reconstruct the adjusting entries that were made on Power’s books at the end of May.
2. By how much would Power’s net income for May have been overstated or understated (indicate which) if these adjusting entries had not been recorded?

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Unadjusted Adjusted Trial Balance Trial Balance Debit Credit Debit Credit Cash $ 3,160 $ 3,160 Accounts Receivable 7,300 9,650 Supplies on Hand 400 160 Prepaid Rent 2,400 2,200 Equipment 9,000 9,000 Accumulated Depreciation $ 2,800 $ 3,200 Accounts Payable 2,600 2,600 Capital Stock 5,000 5,000 Retained Earnings 8,990 8,990 Service Revenue 6,170 8,520 Promotions Expense 2,050 2,050 Wage Expense 1,250 2,350 Wages Payable 1,100 Supplies Expense 240 Depreciation Expense 400 Rent Expense 200 Totals $25,560 $25,560 $29,410 $29,410