Limelight Company records these journal entries:

Prepaid insurance expired

$53

Accrued rent expense

$28

Salaries previously accrued are paid

$27

Common stock is issued for cash$35

Indicate theneteffect of these journal entries (i.e., combined effect of all four journal entries) on the following items. Indicate the dollar amount of the net effect and the direction of the net effect. (Example: $13 Increase, or $8 Decrease, or No Effect.) Hint: Prepare the journal entries.

1. Net Income
2. Total Assets
3. Total Liabilities
4. Retained Earnings
5. Total Equity
6. Working Capital

Rocinante, LLC fails to record these journal entries:

Accrued interest revenue$85Payment of salaries payable$25Cash payment for advertising services$12

Determine theneteffect of these errors (i.e., combined effect of all three errors) on the following items. Indicate the dollar amount of the net error and the direction of the net error. (Example: $17 overstated, or $12 understated, or No Error.) Hint: Prepare the journal entries

1. Net Income
2. Total Liabilities
3. Total Assets
4. Retained Earnings