Following are two income statements for Javelin Company for the month ended December 31, 2023. Column B was prepared before any adjusting entries were recorded and column D includes the effects of adjusting entries. The company records cash receipts and disbursements related to unearned and prepaid items in balance sheet accounts. Analyze the statements and prepare the adjusting entries that must have been recorded.

Analysis Component:
Identify and explain which GAAP requires that adjusting entries be recorded. By how much would revenues, expenses, and profit be overstated/understated if adjustments were not recorded at December 31, 2023, for Javelin Company?

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73-2 1 ΟΔΩΝΙ 2 3 4 5 Home P18 Insert Page Layout Formulas. Data Review View fx A Javelin Company Income Statements.xlsx Salaries expense Insurance expense 6 Revenues: 7 Service revenue 8 Commissions revenue 9 Total revenues 10 Operating expenses: 11 Depreciation expense, computers 12 Depreciation expense, office furniture 13 14 15 16 17 18 19 20 Profit B Javelin Company Income Statements For Month Ended December 31, 2023 Advertising expense Utilities expense Rent expense Office supplies expense Total operating expenses Before Adjustments $ 48,000 85,000 $133,000 $ -0- -O- 25,000 -O- 9,000 -0- 6,000 2,500 $ 42,500 $ 90,500 C Adjustments D After Adjustments $ 60,000 85,000 $145,000 $ 3,000 3,500 29,900 2,600 9,000 960 6,000 2,640 $ 57,600 $ 87,400