Shayla Green owns Creative Designs. The trial balance of the firm for January 31, 20x1, the first month of operations, is shown below. End-of-the-month adjustments must account for the following items: a. Supplies were purchased on January 1, 20X1; Inventory of supplies on January 31, 20X1, Is $1.300. b. The prepaid advertising contract was signed on January 1, 20X1, and covers a four-month period. c. Rent of $1.800 expired during the month. d. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of 10 years with no salvage value. Required: 1. Complete the worksheet for the month. 2 Prepare an income statement, statement of owner's equity, and balance sheet. No additional Investments were made by the owner during the month. 3. Journalize and post the adjusting entries. Analyze If the adjusting entries had not been made for the month, by what amount would net Income be overstated or understated? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Inc Stmt Reg 2 Stmt of OE Reg 2 Bal Sheet Reg 3 Gen Journal Reg 3 Ledgers Analyze Complete the worksheet for the month. Account Name Income Statement Debit Credit s Is Trial Balance Debit Credit 35.900 13,000 8,550 10,000 21,600 28.400 CREATIVE DESIGNS Worksheet Month Ended January 31, 20X1 Adjustments Adjusted Trial Balance Debit Credit Debit Credit $ 35.900 13,000 7.250 1,300 2.500 7,500 1.800 19,800 28,400 220 220 15.950 60.400 7.400 58.200 2.500 2.500 220 220 1.800 1,800 10.100 7.250 7.250 1,600 11.770 $ 11.770 $ 134.770 $ 134.770 Balance Sheet Debit Credit 35,000 13,000 1,300 7,500 19,800 28,400 220 15,950 60,400 7,400 15.950 60.400 Cash Accounts receivable Supplies Prepaid advertising Prepaid rent Equipment Accumulated depreciation Equipment Accounts payable Shayla Green Capital Shayla Green, Drawing Fees income Advertising expense Depreciation expense-Equipment Rent expense Salaries expense Supplies expense Utilities expense Subtotals Net income Totals 7.400 58.200 58,200 10.100 2.500 220 1.800 10.100 7.250 1.600 23.470 34.730 58.200 1,600 $ 134.550 $ 134.550 $ $ S 58,200 S 111,300 s 78,570 34,730 111.300 $ 58,200 $ 111,300 S CREATIVE DESIGNS Income Statement Month Ended January 31, 20X1 Revenue Fees income $ 58.200 $ Expenses Advertising expense Depreciation expense-Equipment Rent expense Salaries expense Supplies expense Utilities expense 2.500 220 1.800 10.100 7.250 1,600 Total expenses Net income 23.470 34.730 FA $ 60,400 CREATIVE DESIGNS Statement of Owner's Equity Month Ended January 31, 20X1 Shayla Green, Capital, January 1, 20X1 Net income for January $ Less: Withdrawals for January Increase in Capital Shayla Green, Capital, January 31, 20X1 34,730 7,400 27,330 87.730 $ $ CREATIVE DESIGNS Balance Sheet January 31, 20X1 Assets Cash Accounts receivable Supplies Prepaid advertising Prepaid rent Equipment Less: Accumulated depreciation-Equipment 35.900 13.000 1.300 7.500 19,800 $ $ 28.400 220 28.180 $ 103,680 Total assets Liabilities and Owner's Equity Liabilities Accounts payable $ 15.950 Owner's Equity Shayla Green Capital A 87,730 Total Liabilities and Owner's Equity $ 103,880 No Date General Journal Debit Credit 1 Jan 31, 20X1 7.250 Supplies expense Supplies 7.250 2 Jan. 31. 20X1 2.500 Advertising expense Prepaid advertising 2.500 3 Jan. 31. 20X1 Rent expense 1,800 Prepaid rent 1,800 4 Jan. 31. 20X1 220 Depreciation expense-Equipment Accumulated depreciation Equipment >> 220 Account No. 121 Credit Balance Account No. 130 Credit Balance Debit Supplies Date Jan. 1. 20X1 Jan. 31. 20X1 Prepaid Advertising Date Debit Jan. 01, 20X1 Jan. 31. 20X1 Account No.131 Credit Balance Prepaid Rent Date Debit Jan. 1. 20X1 Jan. 31. 20X1 Accumulated Depreciation- Equipment Date Debit Jan. 31, 20X1 Account No. 142 Credit Balance Supplies Expense Date Debit Jan. 31 20X1 Account No.517 Credit Balance Advertising Expense Date Debit Account No. 519 Credit Balance Jan. 31, 20X1 Rent Expense Date Debit Jan. 31. 20X1 Account No. 520 Credit Balance Depreciation Expense-Equipment Date Debit Jan. 31. 20X1 Account No. 523 Credit Balance If the adjusting entries had not been made for the month, by what amount would net income be overstated or understated? Net income Amount