Coy Williams, a first-year accountant at Protein Plus, has asked you to review the following items for potential errors. Protein Plus has a December 31 year-end.
1. Did not adjust the Prepaid Insurance account for the $6,600 of insurance that expired during the year.
2. Recorded a full year of accrued interest on a $20,000, 10% note payable that was entered into on July 1. Interest is payable each July 1.
3. Did not record $8,500 of depreciation on an office building.
4. Recorded revenues of $12,000 when payment was received for a job that will be completed next year.
5. Recorded $600 of utilities expense for December utilities even though Protein Plus will not pay the bill until January of next year.
Required
Determine if Coy made any errors in the five items. For those in which an error was made, prepare the entry that Coy should have made. What was the net effect of Coy's errors on the net income of Protein Plus?