The work sheet for Bridges Company shows net income of \(\$ 40,000\). The following four adjustments were ignored:

1. Subscriptions Fees earned, \(\$ 1,200\).

2. Depreciation of equipment, \(\$ 4,000\).

5. The post-closing trial balance may contain revenue and expense accounts.

6. All accounting systems currently in use are computerized.

4. Which of the following statements is false regarding the closing process?

a. The Dividends account is closed to Income Summary.

b. The closing of expense accounts results in a debit to Income Summary.

c. The closing of revenues results in a credit to Income Summary.

d. The Income Summary account is closed to the Retained Earnings account.

5. Which of the following statements is true regarding the classified balance sheet?

a. Current assets include cash, accounts receivable, and equipment.

b. Plant, property, and equipment is one category of long-term assets.

c. Current liabilities include accounts payable, salaries payable, and notes receivable.

d. Stockholders' equity is subdivided into current and long-term categories.

Now turn to page 170 to check your answers.

3. Depreciation of building, \(\$ 10,000\).

4. Salaries accrued, \(\$ 3,000\).

What is the correct net income?