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 company's records and related documents: a. On July 1, 2017, a three-year insurance premium on equipment in the amount of $840 was paid and debited in full to Prepaid b. At the end of 2017, the unadjusted balance in the Office Supplies account was $1,200. A physical count of supplies on December 31, 2017 indicated supplies costing $420 were still on hand. c. On December 31, 2017 YY's Garage completed repairs on one of Brokeback's trucks at a cost of $880. The amount is not yet recorded. It will be paid during January 2018, d. In December, the 2017 property tax bill for $1.920 was received from the city. The taxes, which have not been recorded, will be paid on February 15, 2018 e On December 31, 2017, the company completed the work on a contract for an out-of-province company for $9,900 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 $2,950, has 9. As of December 31, the company owes interest of $600 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. n. The income before any of the adjustments or income taxes was $34,000. The company's 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. not been recorded 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.) View transaction lit Journal entry worksheet 1 2 4 5 6 7 8 On July 1, 2017, a three-year insurance premium on equipment in the amount of $840 was paid and debited in full to Prepaid Insurance on that date. Coverage began on July 1. Note: Enter debits before credit 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.) View transaction list Journal entry worksheet On July 1, 2017, a three-year insurance premium on equipment in the amount of $840 was paid and debited in full to Prepaid insurance on that date. Coverage began on July 1. Note: Enter debits before credite Transaction General Journal Debit Credit a. Record entry Clear entry View general Journal 2. Without the adjustments made in requirement 1, by what amount would Brokeback's net income have been understated or overstated? $8,359 Overstated $8,359 Understated
