North Star prepared the following unadjusted trial balance at the end of its second year of operations ending December 31, 2012.

Account Titles	Debit			Credit
Cash	$	12,800
Accounts Receivable		6,800
Prepaid Rent		2,560
Equipment		21,800
Accumulated Depreciation				$	1,080
Accounts Payable					1,080
Utilities Payable					0
Income Tax Payable					0
Contributed Capital					25,600
Retained Earnings					2,900
Sales Revenue					52,400
Wages Expense		25,800
Utilities Expense		13,300
Rent Expense		0
Depreciation Expense		0
Income Tax Expense		0
Totals	$	83,060		$	83,060

Other data not yet recorded at December 31, 2012:

a.	Rent expired during 2012, $1,280.
b.	Depreciation expense for 2012, $1,080.
c.	Utilities payable, $9,800.
d.	Income tax expense, $470.

Required:

1.

Indicate the accounting equation effects of each required adjustment. (Enter all amounts as positive values.)

2.	Prepare the adjusting journal entries required at December 31, 2012. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

3.

Summarize the adjusting journal entries in T-accounts. After entering the beginning balances and computing the adjusted ending balances, prepare an adjusted trial balance as of December 31, 2012.

4-a.

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

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

Transcatio Stockholders' Equity Assets Liabilities C. d