The reported net income amounts for Gulf Coast Magazine, Inc., for calendar years 1999 and 2000 were \(\$ 200,000\) and \(\$ 222,000\), respectively. No annual adjusting entries were made at either year-end for any of the following transactions:

1. A fire insurance policy to cover a three-year period from the date of payment was purchased on March 1, 1999, for \(\$ 3,600\). The Prepaid Insurance account was debited at the date of purchase.

2. Subscriptions for magazines in the amount of \(\$ 72,000\) to cover an 18 -month period from May 1, 1999, were received on April 15, 1999. The Unearned Subscription Fees account was credited when the payments were received.

3. A building costing \(\$ 180,000\) and having an estimated useful life of 50 years and a salvage value of \(\$ 30,000\) was purchased and put into service on January 1, 1999 .

4. On January 12,2000 , salaries of \(\$ 9,600\) were paid to employees. The account debited was Salaries Expense. One-third of the amount paid was earned by employees in December of 1999 .

Calculate the correct net income for 1999 and 2000. In your answer, start with the reported net income. Then show the effects of each correction (adjustment), using a plus or a minus to indicate whether reported income should be increased or decreased as a result of the correction. When the corrections are added to or deducted from the reported net income amounts the result should be the correct net income amounts. The answer format should appear as follows:

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Explanation of Corrections Reported net income... To correct error in accounting for: a. Fire insurance policy premium: Correct expense in 1999 Correct expense in 2000 1999 2000 $200,000 $222,000 -1,000 -1,200