26) The Schauer Company had the following adjustments at December 31, 2023, the end of the accounting period: A. The Schauer Company uses straight-line depreciation for its equipment. The cost of the equipment is $105,000 and the useful life is 5 years. The equipment was purchased on January 1, 2023 and has no residual value. B. Accrued interest of $10,000 on a note receivable will be received in January. C. On November 1, 2023, the Schauer Company paid $3,000 for six months of rent in advance. The rental period is November 1, 2023 through April 30, 2024. D. On August 1, 2023, the company collected $24,000 in advance for a consulting contract, which is to be earned evenly over the next 24 months. E. Employees are owed salaries for 3 days of a 5-day workweek; weekly payroll is $30,000. F. The unadjusted balance of the supplies account is $2,750. Based on a physical count, the cost of supplies on hand is $1,000. G. The company has incurred interest expense of $1,000 that will be paid in January. Required: 1. Journalize the adjusting entries. Explanations are not required. 2. Assuming the adjustments were not made, calculate the net overstatement or understatement this would have on net income. Would the company appear to be more or less profitable if the adjustments were not made? 27) Michael Company has just completed operations for the year ended December 31, 2024. This is the second year of operations for the company. The following data have been assembled for the business: Accounts Payable $12,200 Office Expense $6,500 Accounts Receivable 18,500 Rent Expense 9,600 Accumulated Dep. - Equipment 4,000 Salaries Payable 3,000 Cash Common Stock 10,200 Retained Earnings, Jan. 1, 2024 8,300 9,000 Salaries Expense 40,000 Dividends declared Equipment Insurance Expense Income Tax Expense 5,000 Service Revenue 84,000 15,000 Utilities Expense 6,200 4,000 Supplies 1,000 4,500 Prepare the income statement, statement of retained earnings, and balance sheet. Use a proper heading. 7