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Angela Mosley owns Innovation Design. The trial balance of the firm for January 3 1 , 2 0 x 2 0 x 1 , the

Angela Mosley owns Innovation Design. The trial balance of the firm for January 31,20x 20x1, the month of operations is shown below
E
nd-of-the-month adjustments must account for the following items:
points
a.Supplies were purchased on January 1,20X1; inventory of supplies on January 31,20X1, is $1,000.
b.The prepaid advertising contract was signed on January 1,20X1, and covers a four-month period.
c.Rent of $1,500 expired during the month.
d. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of 10 years with no salvage value.
Required:
1. Complete the worksheet for the month.
2. Prepare an income statement, statement of owner's equity, and balance sheet. No additional investments were made by the owner during the month. |
3. Journalize and post the adjusting entries.
Analyze
If the adjusting entries had not been made for the month, by what amount would net income be overstated or understated?

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