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Starbooks Corporation provides an online bookstore for electronic books. The following is a simplified list of accounts and

amounts reported in its accounting records. The accounts have normal debit or credit balances. Assume the year ended

on September $30.$

Required:

Prepare the closing entry required at September $30.$

Required information

$[$The following information applies to the questions displayed below.$]$

Brokeback Towing Company is at the end of its accounting year, December $31,2024.$ The following data that must be

considered were developed from the company's records and related documents:

a$.$ On July $1,2024,$ a two$-$year insurance premium on equipment in the amount of $$576$ was paid and debited in full to

Prepaid Insurance on that date. Coverage began on July $1.$

b$.$ At the end of $2024,$ the unadjusted balance in the Supplies account was $$1,000.$ Fiphysical count of supplies on

December $31,2024,$ indicated supplies costing $$290$ were still on hand.

c$.$ On December $31,2024,$ YY$\text{'}$s Garage completed repairs on one of Brokeback's trucks at a cost of $$790.$ The amount is

not yet recorded. It will be paid during January $2025.$

d$.$ On December $31,2024,$ the company completed a contract for an out$-$of$-$state company for $$7,900$ 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 $1,2024,$ the company purchased a new hauling van. Depreciation for July$-$December $2024,$ estimated to total

$$2,700,$ has not been recorded.

f$.$ As of December $31,$ the company owes interest of $$490$ on a bank loan taken out on October $1,2024.$ The interest will

be paid when the loan is repaid on September $30,2025.$ No interest has been recorded yet.

g$.$ Assume the income after the preceding adjustments but before income taxes was $$29,000.$ The company's federal

income tax rate is $25\%.$ Compute and record income tax expense.

Required:

Give the adjusting journal entry required for each item at December $31,2024.$

If adjustments were not made each period, the financial results could be materially misstated. Determine the amount by which

Brokeback's net income would have been understated or overstated had the adjustments in requirement $1$ not been made.

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