E4-19 (Algo) Reporting a Correct Income Statement with Earnings per Share to Include the Effects of Adjusting Entries and Evaluating Total Asset Turnover as an Auditor LO4-1, 4-2, 4-3 Jay, Inc., a party rental business, completed its third year of operations on December 31. Because this is the end of the annual accounting period, the company bookkeeper prepared the following tentative income statement: Income Statement Rent revenue Expenses: Salaries and wages expense Maintenance expense $105,000 26,200 10,200 Rent expense 7,400 Utilities expense 3,800 Gas and oil expense 2,800 Miscellaneous expenses (items not 2,000 listed elsewhere) Total expenses 52,400 Income $ 52,600 You are an independent CPA hired by the company to audit the company's accounting systems and review the financial statements. In your audit, you developed additional data as follows: a. Wages for the last three days of December amounting to $770 were not recorded or paid. b. Jay estimated telephone usage at $390 for December, but nothing has been recorded or paid. c. Depreciation on rental autos, amounting to $22,100 for the current year, was not recorded. d. Interest on a $14,000, one-year, 14 percent note payable dated October 1 of the current year was not recorded. The 14 percent interest is payable on the maturity date of the note. e. Maintenance expense excludes $1,200, representing the cost of maintenance supplies used during the current year. f. The Unearned Rent Revenue account includes $4,700 of revenue to be earned in January of next year. g. The income tax expense is $4,500. Payment of income tax will be made next year. Required: 1. What adjusting entry for each item (a) through (g) should Jay record at December 31? 2. Prepare a corrected income statement for the current year in good form, including earnings per share, assuming that 7,400 shares of stock are outstanding all year. 3. Compute the total asset turnover ratio based on the corrected information. Assume the beginning-of-the-year balance for Jay's total assets was $58,220 and its ending balance for total assets was $65,380. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a corrected income statement for the current year in good form, including earnings per share, assuming that 7,400 shares of stock are outstanding all year. (Round "Earnings per share" to 2 decimal places.) JAY, INC. Income Statement For the Current Year Ended December 31 Operating revenue: Rent revenue Operating expenses: Total expenses Other Item: Earnings per share 0 0 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the total asset turnover ratio based on the corrected information. Assume the beginning-of-the-year balance for Jay's total assets was $58,220 and its ending balance for total assets was $65,380. (Round your answer to 2 decimal places.) Total asset turnover ratio