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Vishakha mowing Company needs to record the following adjustments at the end of its current accounting year, December 31 a. On July 1. a two-year

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Vishakha mowing Company needs to record the following adjustments at the end of its current accounting year, December 31 a. On July 1. a two-year insurance premium on equipment in the amount of $648 was paid and debited in full to Prepaid Insurance on that date. Coverage began on July 1 . b. At the end of the year, the unadjusted balance in the Supplies account was $1,000. A physical count of supplies on December 31 indicated supplies costing $320 were still on hand. c. On December 31, YY's Garage completed repairs on one of Vishakha's trucks at a cost of 5820 . The amount is not yet recorded. It will be paid during January next year. d. On December 31, the company completed a contract for an out-of-state company for $8,050 payable by the customer within 30 days. No cash has been collected and no journal entry has been made for this transaction. e. On July 1, the company purchased a new hauling van. Depreciation for July-December current year. estimated to total $2,850, has not been recorded. f. As of December 31, the company owes interest of $520 on a bank loan taken out on October 1 . The interest will be paid when the loan is repaid on September 30 , next year. No interest has been recorded yet. g. Assume the income after the preceding adjustments but before income taxes was $32,000. The company's income tax rate is 25%. Compute and record income tax expense. Using the information above and the templates below, complete the following: 1. Give the adjusting journal entry required for each item at December 31 , this year. (7 marks) 2. If adjustments were not made each period, the financial results could be materially misstatec Determine the amount by which Vishakha's net income would have been understated, or overstated, had the adjustments in requirement 1 not been made. ( 3 marks)

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