problem 7:

14 Mint Cleaning Incorporated prepared the following unadjusted trial balance at the end of its second year of operations ending December 31. (Assume amounts are reported in thousands of dollars.) Account Titles Debit Credit Cash $ 43 Accounts Receivable Prepaid Insurance 6 Equipment 90 Accumulated Depreciation $ 0 Accounts Payable 14 Salaries and Wages Payable 0 Income Tax Payable 0 Common Stock 83 Retained Earnings 14 Sales Revenue 88 Insurance Expense 0 Salaries and Wages Expense 15 Supplies Expense 31 Income Tax Expense 0 Totals $ 199 $ 199 Other data not yet recorded at December 31: a. Insurance expired during the year, $4. b. Depreciation expense for the year. $3. c. Salaries and wages payable, $6. d. Income tax expense, $8. Required: 3. By what amount would net income have been understated or overstated had the adjusting journal entries not been recorded? (Enter your answers in thousands of dollars.) Net income overstated understated