$\backslash$table$[[$Fees$,\frac{\text{E}\text{a}\text{m}\text{e}\text{d}}{56500},$Supplies,Expense,Unearned,Revenue$],[$Deprec$,$Expense,Insurance,Expense,Wages,Expense$],[,,,,22,100,]]$

The following information was obtained from the accounting records:

An imentory of supplies indicates supplies with a cost of $$1,800$ remailn

The begirning balance of Prepaid insurance represents a one$-$year policy purchased the previous year.

The suly $1$ amount represents the purchase of a one$-$year policy.

Of the Unearred Revenue, $40\%$ remained uneamed at year$-$end.

The Equipment has a ten$-$year life and is depreciated using the straight$-$line method.

Salaries are paid every two weeks on Friday $(10$ workdays$).$ The next payroll cycle ends on lanuary $2$ nd$.$ Total payroll on that date will be $$3,000.$

Services rendered but unbilled at year end amounted to $$3,500.$

Required:

Using the information above, prepare the necessary adjusting entries in "Adjusting Entries" tab and post to the T$-$accounts above;

Based on the adjusted balances above, prepare the necessary closing entries in "Closing Entries" tab and post to the T$-$accounts above

Please answer the following questions:

A$.$ What is the effect on Net Income of making Adjustments $1-6?$

If Adjusting entry #$3$ is omitted, which of the following financial statement items will be overstated or understated?

Assets

Liabilities

Stockholder's Equity

Revenue

Expense

Net Income

C$.$ Which accounting principles govem the recognition of revenue and expense in an accounting period?

D$.$ What is the Net Income for the period? What is the balance in Retained Earnings at $12/31?$