Had the adjusting entries not been recorded, would net income have been overstated or understated, and by what amount?

Compute the amount of net income using (a) the preliminary (unadjusted) numbers and (b) the final (adjusted) numbers.

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North Star prepared the following unadjusted trial balance at the end of its second year of operations ending December 31.

Account Titles	Debit	Credit
Cash	$ 11,600
Accounts Receivable	5,600
Prepaid Rent	2,320
Equipment	20,600
Accumulated Depreciation		$ 1,140
Accounts Payable		1,140
Income Tax Payable		0
Common Stock		24,400
Retained Earnings		1,700
Sales Revenue		48,440
Salaries and Wages Expense	24,600
Utilities Expense	12,100
Rent Expense	0
Depreciation Expense	0
Income Tax Expense	0
Totals	$ 76,820	$ 76,820

Other data not yet recorded at December 31:

1. Rent expired during the year, $1,160.
2. Depreciation expense for the year, $1,140.
3. Utilities used and unpaid, $8,600.
4. Income tax expense, $350.

Required:

4. Compute the amount of net income using (a) the preliminary (unadjusted) numbers and (b) the final (adjusted) numbers. Had the adjusting entries not been recorded, would net income have been overstated or understated, and by what amount?