Brokeback Towing Company is at the end of its accounting year, December 31, 2017 The following data that must be considered were developed from the companys records and related documents On July 1, 2017, a three year insurance premium on equipment in the amount of $960 was paid and debited in full to Prepaid Insurance on that date Coverage began on July 1 At the end of 2017, the unadjusted balance in the Office Supplies account was $1,300 A physical count of supplies on December 31, 2017, indicated supplies costing $480 were still on hand On December 31, 2017, YYs Garage completed repairs on one of Brokebacks trucks at a cost of $920 The amount is not yet recorded It will be paid during January 2018 In December, the 2017 property tax bill for $2,080 was received from the city The taxes, which have not been recorded, will be paid on February 15, 2018 On December 31, 2017, the company completed the work on a contract for an out of province company for $10,900 payable by the customer within 30 days No cash has been collected and no journal entry has been made for this transaction On July 1, 2017, the company purchased a new hauling van Depreciation for July to December 2017, estimated to total $3,050, has not been recorded As of December 31, the company owes interest of $650 on a bank loan taken out on October 1, 2017 The interest will be paid on September 30, 2018, when the loan is repaid No interest has been recorded yet The income before any of the adjustments or income taxes was $36,000 The companys federal income tax rate is 30 percent Compute adjusted income based on all of the preceding information, and then determine and record income tax expense Required 1 Give the adjusting journal entry required for each transaction at December 31, 2017 (Do not round intermediate calculations If no entry is required for a transaction event, select No journal entry required in the first account field ) 2 Without the adjustments made in requirement 1, by what amount would Brokebacks net income have been understated or overstated multiple choice $8,546 Overstated $8,546 Understated

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Brokeback Towing Company is at the end of its accounting year, December 31, 2017. The following data that must be considered were developed from the

Brokeback Towing Company is at the end of its accounting year, December 31, 2017. The following data that must be considered were developed from the companys records and related documents:

On July 1, 2017, a three-year insurance premium on equipment in the amount of $960 was paid and debited in full to Prepaid Insurance on that date. Coverage began on July 1.
At the end of 2017, the unadjusted balance in the Office Supplies account was $1,300. A physical count of supplies on December 31, 2017, indicated supplies costing $480 were still on hand.
On December 31, 2017, YYs Garage completed repairs on one of Brokebacks trucks at a cost of $920. The amount is not yet recorded. It will be paid during January 2018.
In December, the 2017 property tax bill for $2,080 was received from the city. The taxes, which have not been recorded, will be paid on February 15, 2018.
On December 31, 2017, the company completed the work on a contract for an out-of-province company for $10,900 payable by the customer within 30 days. No cash has been collected and no journal entry has been made for this transaction.
On July 1, 2017, the company purchased a new hauling van. Depreciation for July to December 2017, estimated to total $3,050, has not been recorded.
As of December 31, the company owes interest of $650 on a bank loan taken out on October 1, 2017. The interest will be paid on September 30, 2018, when the loan is repaid. No interest has been recorded yet.
The income before any of the adjustments or income taxes was $36,000. The companys federal income tax rate is 30 percent. Compute adjusted income based on all of the preceding information, and then determine and record income tax expense.

Required: 1. Give the adjusting journal entry required for each transaction at December 31, 2017. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. Without the adjustments made in requirement 1, by what amount would Brokebacks net income have been understated or overstated? multiple choice