Magic Cleaning Services has a fiscal year end of December 31st.It is in its first year of operations.As of December 31, Magic has the following unadjusted trial balance:

Account Debit Credit

Cash $ 430,900

Accounts Receivable $158,000

Supplies $111,000

Building $90,000

Accounts Payable $45,900

Unearned Service Revenue $ 108,000

Common Stock $ 100,000

Retained Earnings -0-

Service Revenue $ 619,200

Wage Expense $48,600

Rent Expense $12,400

Utilities Expense $6,200

Administrative Expense $16,000

TOTALS $ 873,100 $ 873,100

In addition, Magic has not yet adjusted for the following:

1.The building was purchased on March 1 of the current year.It has a 30-year life, 10% salvage value and Magic uses the straight-line method for depreciation.

2.On September 1, Magic prepaid $12,400 for 10 months of rent on a warehouse.The original entry was recorded as Rent Expense.

3.By December 31st, 30% of the of the services related to the Unearned Revenues had been performed.

4.Wages of $4,600 should be accrued and are scheduled to be paid on January 2.

5.Supplies of $98,000 were still on hand at year end.

6.Based on industry averages, it is estimated that 3% of the accounts receivable will prove tobe uncollectible.

1) Using the information presented above for Magic Cleaning Services,determineNet IncomeAFTERall adjustments have been recorded:

2) Using the information presented for Magic Cleaning Services,IFnoneofthe (6)adjusting journal entries had been recorded,determine the effect on Total Assets.

3) Using the information presented for Magic Cleaning Services,IFnoneofthe (6)adjusting journal entries had been recorded,determine the effect on Total Liabilities.