Table 3-1

Lemon Car Rental, Inc.

Unadjusted Trial Balance

December 31, 2012

Cash $ 7,450

Prepaid insurance 1,600

Equipment 19,000

Accumulated Depreciation $ 4,200

Accounts Payable 5,000

Common Stock 10,000

Retained Earnings 5,600

Dividends 6,000

Rental Revenue 23,400

Insurance Expense 7,000

Salary Expense 4,000

Repair Expense 3,150

$ 48,200 $ 48,200

Adjusting entries include:

(1) Prepaid insurance used $ 1,600

(2) Depreciation 1,300

$ 2,900

Refer to Table 3-1. After posting adjusting entries, net income:

		a. will be $6,350.
		b. will be $9,250
		c. will be $7,950.
		d. cannot be determined from the given information.