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E4-16 through E4-18 (Algo) Recording Four Adjusting Journal Entries, Preparing an Adjusted Trial Balance, Reporting an Income Statement, Statement of Retained Earnings, Balance Sheet, Recording Closing Entries [LO 4-2, LO 4-3, LO 4-4, LO 4-5] Skip to question [The following information applies to the questions displayed below.] Mint Cleaning Incorporated prepared the following unadjusted trial balance at the end of its second year of operations ending December 31. (Assume amounts are reported in thousands of dollars.) Account Titles Debit Credit Cash $ 50 Accounts Receivable 12 Prepaid Insurance 7 Equipment 104 Accumulated Depreciation $ 0 Accounts Payable 12 Salaries and Wages Payable 0 Income Tax Payable 0 Common Stock 98 Retained Earnings 16 Sales Revenue 107 Insurance Expense 0 Salaries and Wages Expense 22 Supplies Expense 38 Income Tax Expense 0 Totals $ 233 $ 233 Other data not yet recorded at December 31: Insurance expired during the year, $6. Depreciation expense for the year, $5. Salaries and wages payable, $8. Income tax expense, $10. E4-16 (Algo) Part 3 Required: By what amount would net income have been understated or overstated had the adjusting journal entries not been recorded? (Enter your answers in thousands, not in dollars (i.e., 10,000 should be entered as 10).)

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