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USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (5) QUESTIONS: Magic Cleaning Services has a fiscal year end of December 31st. It is in its

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USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (5) QUESTIONS: Magic Cleaning Services has a fiscal year end of December 31st. It is in its first year of operations As of December 31, Magic has the following unadjusted trial balance: Account Debit Credit Cash $430,900 Accounts Receivable $158,000 Supplies $ 90,000 Building $111,000 Accounts Payable $ 46,100 Unearned Service Revenue $ 108,000 Common Stock $ 100,000 Retained Earnings -0- Service Revenue S 619,200 Wage Expense $ 48,600 Rent Expense $ 12,600 Utilities Expense $ 6,200 Administrative Expense $ 16,000 TOTALS $ 873,300 $ 873,300 In addition, Magic has not yet adjusted for the following: 1. The building was purchased on March 1 of the current year. It has a 30-year life, 10% salvage value and Magic uses the straight-line method for depreciation. 2. On April 1, Magic prepaid $12,600 for 12 months of rent on a warehouse. The original entry was recorded as Rent Expense. 3. By December 31st, 40% of the of the services related to the Uneared Revenues had been performed 4. Wages of $4,800 should be accrued and are scheduled to be paid on January 2. 5. Supplies of $75,000 were still on hand at year end. 6. Based on industry averages, it is estimated that 2.5% of the accounts receivable will prove to be uncollectible. O credit Rent Expense for $3,150 Question 5 1 pts Using the information presented above for Magic Cleaning Services, determine Net Income AFTER all adjustments have been recorded: $. O $535,800 O $520,800 $517,470 $555,625 O $560,670 Question 6 1 pts $560,670 Question 6 1 pts Using the information presented for Magic Cleaning Services, IF none of the (6) adjusting journal entries had been recorded, determine the effect on Total Assets. ASSETS LIABILITIES EQUITY ??? Overstated by $18,575 Overstated by $15,000 Overstated by $15,800 Overstated by $13,025 Overstated by $38,400 D Question 8 1 pts Using the information presented for Magic Cleaning Services, IF none of the (6) adjusting journal entries had been recorded, determine the effect on Total EQUITY. ASSETS LIABILITIES EQUITY ??? O Understated by $23,400 Understated by $19,825 Overstated by $21,725 Understated by $26,550 Question 9 1 pts

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