Mint Cleaning Inc. prepared the following unadjusted trial balance at the end of its second year of operations ending December 3

Question

22 days ago

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Mint Cleaning Inc. prepared the following unadjusted trial balance at the end of its second year of operations ending December 3

1. (Assume amounts are reported in thousands of dollars.) Account Titles Debit Credit Cash $ 52 Accounts Receivable 14 Prepaid Insurance 9 Equipment 108 Accumulated Depreciation $ 0 Accounts Payable 14 Common Stock 104 Retained Earnings 17 Sales Revenue 112 Insurance Expense 0 Salaries and Wages Expense 24 Supplies Expense 40 Totals $ 247 $ 247 Other data not yet recorded at December 31: Insurance expired during the year, $7. Depreciation expense for the year, $6. Salaries and wages payable, $9. Income tax expense, $11. By what amount would net income have been understated or overstated had the adjusting journal entries not been recorded? (Enter your answers in thousands of dollars.)

Business

1 answer:

stepan [3K] · Answer 1 · 2026-03-14T09:14:40+03:00

Answer:

The overstatement will amount to 33 dollars.

Explanation:

We will evaluate the impact of each adjusting entry on the net income

The effects of adjusting entries:

Expired insurance (7) (expense)

Depreciation (6) (expense)

Accrued salaries and wages (9) (expense)

Income tax expense (11) (expense)

Total impact: (33)

The adjustments would lower the net income by 33

Hence, omitting these adjustments will result in a net income that is overstated by 33 dollars.