North Star prepared the following unadjusted trial balance at the end of its second year of operations ending December 31. Account Titles Cash Accounts Receivable Prepaid Rent Equipment Accumulated Depreciation Accounts Payable Income Tax Payable Common Stock Retained Earnings Sales Revenue Salaries and Wages Expense Utilities Expense Rent Expense Depreciation Expense Income Tax Expense Totals Other data not yet recorded at December 31: a. Rent expired during the year, $1,250. b. Depreciation expense for the year, $1,050. c. Utilities used and unpaid, $9,500. d. Income tax expense, $440. Debit $ 12,500 6,500 2,500 21,500 25,500 13,000 0 0 $ 81,500 Credit $ose 1,050 0 25,300 2,600 51,500 $81,500

7. 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? Complete this question by entering your answers in the tabs below. Compute the amount of net income using (a) the preliminary (unadjusted) numbers and (b) the final (adjusted) numbers. North Star prepared the following unadjusted trial balance at the end of its second year of operations ending December 31. Other data not yet recorded at December 31: a. Rent expired during the year, $1,250. b. Depreciation expense for the year, $1,050. c. Utilities used and unpaid, \$9,500. d. Income tak expense, $440 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? Complete this question by entering your answers in the tabs below. Had the adjusting entries not been recorded, would net income have been overstated or understated, and by what amount