Use the following information to complete the worksheet below. You will need to enter the adjusting entries and then complete the adjusted trial balance. (Corresponds with workbook Problem 4-6A) Southwest Careers provides training to individuals who pay tuition directly to the business. The business also offers extension training to groups in off-site locations. Southwest Careers follows the practice of initially recording prepaid expenses and unearned revenues in balance sheet accounts. Facts that require eight adjusting entries on December 31, 2005, are presented below: Adjusted Trial Balance Accounts Unadjusted Trial Balance Adjustments Debit Credit Debit $26,000 0 Accounts Rocconale Teaching Supplies 10,000 Propaid Tasustice 15,000 Propeid Ren 2,000 0 Professional Library 30,000 0 Accura, Amor-Pro Filmy 9,000 Equipment 70,000 Accum, Amos Equipment fudged 16,000 Accounts Payable Ofgfd 36,000 f Salaries Payable Unter ned Exten 11,00 0 sion Fees Sheil 63,60 Carr, f 0 Capit 7 Shell 3 Carr, With 40,00 0 drw Tuitio Fees 102.0 00 Eame d Extension Fees Eamed Ainar Expe Expi meer 38,000 Credit Debit Credit Explore $3,000 1,000 1800 STUN + Additional facts available on December 31, 2005, the business's year-end: a. An analysis of the company's policies shows that $3,000 of insurance coverage has expired. b. An inventory shows that teaching supplies costing $2,600 are on hand at the end of the year. c. The estimated annual amortization on the equipment is $12,000 d. The estimated annual amortization on the professional library is $6,000. e. The school offers off-campus services for specific employers. On November 1, the company agreed to do a special six-month course for a client. The contract calls for a monthly fee of $2,200, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Extension Fees account was credited. On October 15, the school agreed to teach a four-month class for an individual for $3,000 tuition per month payable at the end of the class. The services to date have been provided as agreed, but no payment has been received. The school's two employees are paid weekly. As of the end of the year, two days' wages have accrued at the rate of $100 per day for each employee. h. The balance in the Prepaid Rent account represents the rent for December. Additional Questions: If the adjustments were not recorded, calculate the over- or understatement of income Is it ethical to ignore adjusting entries?