during the month of January: the house will have an estimated useful life of 25 years and an estimated salvage value of $5,000. January 4: New furniture for the inn is purchased at a cost of $15,000 in cash. The furniture has an estimated useful life of ten years and no salvage value. January 5: A 24-month property insurance policy is purchased for $6,000 in cash. January 6: An advertisement for the inn is placed in the local newspaper. Moonlight Bay pays $450 cash for the ad, which will run in the paper throughout January. January 7: Cleaning supplies are purchased on account for $950. The bill is payable within 30 days. January 15: Wages of $4,230 for the first half of the month are paid in cash. January 31: Cash receipts from rentals of rooms for the month amount to $8,300. January 31: Cash receipts from operation of the restaurant for the month amount to $6,600. January 31: Each stockholder is paid $200 in cash dividends. Assume a 360 -day year. When required, do not round your intermediate calculations and round your final answers to the nearest whole dollar. Required: 3. Identify and analyze the necessary adjustments for each of the following: a. Depreciation of the house. Use straiaht line method of depreciation. d. Recognition of the expired portion of the insurance. How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" e. Recognition of the earned portion of the guest's deposit. f. Wages earned during the second half of January amount to $5,120 and will be paid on February 3 . How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the eff g. Cleaning supplies on hand on January 31 amount to $230. h. A gas and electric bill that is received from the city amounts to $740 and is payable by February 5 . How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effe i. Income taxes are to be accrued at a rate of 30% of income before taxes. How does this entry affect the accounting equation? 4a. Prepare an income statement for the month ended January 31, 2017. Moonlight Bay Inn Income Statement For the Month Ended January 31, 2017 Revenues: Total revenues Expenses: Total expenses $ Ar Dranaro a halanra chaot at lanilare 21 nd 7 a. The inn has shown a profit, but the balance sheet does not show a strong position. The banker should not be comfortable with the loan made. b. The inn has shown a profit and the balace sheet shows a strong position. The banker should be comfortable with the loan made. c. The inn has shown a loss but the balace sheet shows a strong position. The banker should be comfortable with the loan made. d. The inn has shown a loss and the balace sheet does not show a strong position. The banks should not be comfortable with the loan made. during the month of January: the house will have an estimated useful life of 25 years and an estimated salvage value of $5,000. January 4: New furniture for the inn is purchased at a cost of $15,000 in cash. The furniture has an estimated useful life of ten years and no salvage value. January 5: A 24-month property insurance policy is purchased for $6,000 in cash. January 6: An advertisement for the inn is placed in the local newspaper. Moonlight Bay pays $450 cash for the ad, which will run in the paper throughout January. January 7: Cleaning supplies are purchased on account for $950. The bill is payable within 30 days. January 15: Wages of $4,230 for the first half of the month are paid in cash. January 31: Cash receipts from rentals of rooms for the month amount to $8,300. January 31: Cash receipts from operation of the restaurant for the month amount to $6,600. January 31: Each stockholder is paid $200 in cash dividends. Assume a 360 -day year. When required, do not round your intermediate calculations and round your final answers to the nearest whole dollar. Required: 3. Identify and analyze the necessary adjustments for each of the following: a. Depreciation of the house. Use straiaht line method of depreciation. d. Recognition of the expired portion of the insurance. How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" e. Recognition of the earned portion of the guest's deposit. f. Wages earned during the second half of January amount to $5,120 and will be paid on February 3 . How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the eff g. Cleaning supplies on hand on January 31 amount to $230. h. A gas and electric bill that is received from the city amounts to $740 and is payable by February 5 . How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effe i. Income taxes are to be accrued at a rate of 30% of income before taxes. How does this entry affect the accounting equation? 4a. Prepare an income statement for the month ended January 31, 2017. Moonlight Bay Inn Income Statement For the Month Ended January 31, 2017 Revenues: Total revenues Expenses: Total expenses $ Ar Dranaro a halanra chaot at lanilare 21 nd 7 a. The inn has shown a profit, but the balance sheet does not show a strong position. The banker should not be comfortable with the loan made. b. The inn has shown a profit and the balace sheet shows a strong position. The banker should be comfortable with the loan made. c. The inn has shown a loss but the balace sheet shows a strong position. The banker should be comfortable with the loan made. d. The inn has shown a loss and the balace sheet does not show a strong position. The banks should not be comfortable with the loan made