Among other accounting issues, we find that the following items were not considered by the company in preparing the income statement and balance sheet. The above statements (unaudited) were presented to a local bank, at the bank's request, to support a loan application. The bank requested that the statements be examined by an independent CPA. Among other accounting issues, we find that the following items were not considered by the company in preparing the income statement and balance sheet. 1. Service revenue of $2,000 had been collected but the related obligations had not been performed as of December 31 . 2. At December 31, salaries earned by employees but not yet paid or recorded amount to $9,000. 3. A count of supplies at December 31 , showed $4,000 of supplies still available. (Supplies are used in repairs.) 4. Depreciation on the equipment acquired on January 3 , was not recorded. The estimated useful life is 10 years. 5. The note receivable received was from a customer and was dated November 1; the principal plus interest is payable April 30 of next year. 6. The note payable to the local bank was dated June 1; the principal plus interest is payable May 31 of next year. 7. Income tax expense is $1,386. Assume that no income tax has been recorded. Record as income taxes payable. Financial Statement Effect b. Determine the effect of each item 1 through 7 on the following categories by indicating the amount reported, the net adjustment, and the adjusted amount. 1. Net income 2. Assets 3. Liabilities 4. Stockholders' equity a. Prepare the adjusting entries that are necessary, if any, on December 31 for each item 1 through 7. b. Determine the effect of each item 1 through 7 on the following categories 1. Net income 2. Assets 3. Liabilities 4. Stockholders' equity Note: Use a negative sign for adjustment answers, as needed