The net income of Thomas & Sons, a landscaping company, decreased sharply during 2018. The owner of the company, Jerry Thomas, anticipates the need for a bank loan in 2019. Late in 2018, Jerry instructs the companys accountant to record $2,000 service revenue for landscape services for the McGrath family, even though the services will not be performed until January 2019. Jerry also tells the accountant not to make the following December 31, 2018 adjusting entries:

• Salaries owed to employees $900
• Prepaid insurance that has expired $400

Requirements:

1. Why is the owner making the suggestions?
2. Calculate the total dollar amount of the affect on net income for the three suggested actions. Be detailed in your response so that we can follow how you calculated the total and why the amounts included in your total impact net income.
3. Of the four financial statements, which are impacted by the suggestions and where in the statement? Be specific and provide sufficient detail to suport your answer.