Return to During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2021 you discover the following a. An insurance policy covering three years was purchased on January 1, 2021, for $5.000. The entire amount was debited to Insurance expense and no adjusting entry was recorded for this item b. During 2021. the company received a $750 cash advance from a customer for merchandise to be manufactured and shipped in 2022. The $750 was credited to sales revenue. No entry was recorded for the cost of merchandise e. There were no supplies listed in the balance sheet under assets. However, you discover that supplies costing 5760 were on hand at December 31 . Hales borrowed $21.000 from a local bank on October 1, 2021. Principal and interest at 12% will be paid on September 30, 2022 No accrual was recorded for interest e. Net Income reported in the 2021 income statement is $36,000 before reflecting any of the above items Required: Determine the proper amount of net income for 2021. (Amounts to be deducted should be indicated by a minus sign) Answer is complete but not entirely correct. 5 38.000 Unadjusted not income Adjustments B Insurance expense overstated D Sales revenue understated C Supplies expense overstated d Interest expense overstated EX 3.400 (750) 700 (630)