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Jay, Incorporated, a party rental business, completed its third year of operations on December $31.$ Because this is the end of the annual

accounting period, the company bookkeeper prepared the following tentative income statement:

You are an independent CPA hired by the company to audit the company's accounting systems and review the financial statements. In

your audit, you developed additional data as follows:

a$.$ Salaries and wages for the last three days of December amounting to $$730$ were not recorded or

b$.$ Jay estimated telephone usage at $$440$ for December, but nothing has been recorded or paid.

c$.$ Depreciation on rental autos, amounting to $$24,000$ for the current year, was not recorded.

d$.$ Interest on a $$15,000,$ one$-$year, $8$ percent note payable dated October $1$ of the current year was not recorded. The $8$ percent

interest is payable on the maturity date of the note.

e$.$ Maintenance expense excludes $$1,100,$ representing the cost of maintenance supplies used during the current year.

f$.$ The Unearned Rent Revenue account includes $$4,100$ of revenue to be earned in January of next year.

g$.$ The income tax expense is $$5,800.$ Payment of income tax will be made next year.

Required:

What adjusting entry for each item $($a$)$ through $($g$)$ should Jay record at December $31?$

Prepare a corrected income statement for the current year including earnings per share. Assume that $7,000$ shares of stock are

outstanding all year.

Compute the total asset turnover ratio based on the corrected information. Assume the beginning$-$of$-$the$-$year balance for Jay's

total assets was $$58,020$ and its ending balance for total assets was $$65,180.$

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Prepare a corrected income statement for the current year including earnings per share. Assume that $7,000$ shares of stock

are outstanding all year.

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