If these adjustments are not recorded,

a. Show and explain the impact on net income with calculation without the adjustments and with the adjustments.

b. Explain the accounting principles that are being violated if the adjustments are not made.

The unadjusted trial balance and the adjustment data for Porter Business Institute are given below along with adjusting entry information. $ 58,000 59,000 12,000 8,000 $ 57,500 2,000 17,500 Porter Business Institute Unadjusted Trial Balance December 31 (in millions) Cash. Accounts receivable. Prepaid insurance Equipment Accumulated depreciation equipment Buildings... Accumulated depreciationbuildings. Land... Unearned rent. Long-term notes payable. Porter, Capital Tuition fees earned Training fees earned Wages expense Utilities expense Property taxes expense Interest expense Totals 55,000 16,000 50,000 115,600 74,000 23,400 32,000 8,000 5,000 4,000 $ 298,500 $298,500 Additional information items: a. The Prepaid Insurance account consists of a payment for a 1 year policy. An analysis of the insurance invoice indicates that one half of the policy has expired by the end of the December 31 year-end. b. A cash payment for space sublet for 8 months was received on July 1 and was credited to Unearned Rent. c. Accr erest expense on the note payable of $1,000 been incurred but not paid. d. Equipment depreciates at the rate of $1000 per year and building depreciates at the rate of $500 per year. e. Services of $3000 were earned but customers were not billed till end of the year