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 $100,000 Expenses: Salaries and wages expense 25,700 11,700 Maintenance expense Rent expense 8,000 Utilities expense 4,200 Gas and oil expense, 3,500 Miscellaneous expenses (items not listed elsewhere) 1,100 Total expenses 54,200 Income $ 51,800 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: 1 a. Wages for the last three days of December amounting to $700 were not recorded or paid. b. Jay estimated telephone usage at $360 for December, but nothing has been recorded or paid. c. Depreciation on rental autos, amounting to $23,500 for the current year, was not recorded. d. Interest on a $12,000, one-year, 5 percent note payable dated October 1 of the current year was not recorded. The 5 percent interest is payable on the maturity date of the note. e. Maintenance expense excludes $1,100, representing the cost of maintenance supplies used during the current year. f. The Unearned Rent Revenue account includes $4,900 of revenue to be earned in January of next year. g. The income tax expense is $4,800. Payment of income tax will be made next year. Required 3 What adjusting entry for each item (a) through (g) should Jay record at December 31? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) g View transaction list View journal entry worksheet No General Journal Debit Credit 1 Salaries and wages expense Salaries and wages payable 2 Utilities expense A S 3 1 4 5 1 / 6 7 Transaction a. b. C. d. e. f. 9. Utilities payable Depreciation expense Accumulated depreciation Interest expense Interest payable Maintenance expense Maintenance supplies No journal entry required Income tax expense Income tax payable 3 Required 1 Required 2 700 360 23,500 150 1,100 4,800 700 360 23,500 150 1,100 4,800 Tam Prepare a corrected income statement for the current year in good form, including earnings per share, assuming that 7,800 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: Salaries and wages expense Maintenance expense Rent expense Utilities expense Gas and oil expense Miscellaneous expenses Depreciation expense Interest expense Total expenses Income tax expense Other Item: Pretax income 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 $59,420 and its ending balance for total assets was $66,580. (Round your answer to 2 decimal places.) Total asset turnover ratio Required 2 3 of 6 Next >