Shown below is a tentative income statement after the first year of operations.
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Income Statement
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December 31
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Rental revenue
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$89,900
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Expenses
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Salaries and wages expense
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$22,000
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Maintenance expense
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8,000
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Rent expense
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9,200
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Utilities expense
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5,200
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Other expenses
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2,000
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Total expenses
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$46,400
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Income
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$43,500
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Suppose there are additional transactions shown below, that were not recorded or paid.
(a) The Unearned Rental Revenue account includes $6,300 of revenue to be earned in the next year.
(b) There were additional wages for the last five days of the year amounting to $650.
(c) Maintenance expense excludes $2,300 representing the cost of maintenance supplies during the year
(d) The company estimated additional utilities for the last month amounting to $550.
(e) Depreciation on equipment amounted to $16,000 for the year.
(f) There is interest on a $10,000, one-year, 6 percent note payable dated November 1st of the year. The interest is payable on the maturity date of the note.
(g) The income tax expense is $3,900 and payment of the income tax will be made the following year.
Find an adjusting entry for each transaction. If none is required, explain why. Prepare a corrected income statement for the year, including earnings per share. Assume that 5,000 shares of stock are outstanding all year. Compute the net profit margin based on the corrected information.