a. Using the information presented above for Magic Cleaning Services, determine Net Income after all adjustments have been recorded:

b. Using the information presented for Magic Cleaning Services, IF none of the (6) adjusting journal entries had been recorded, determine the effect on Total Assets.

c. Using the information presented for Magic Cleaning Services, IF none of the (6) adjusting journal entries had been recorded, determine the effect on Total Liabilities.

d. Using the information presented for Magic Cleaning Services, IF none of the (6) adjusting journal entries had been recorded, determine the effect on Total EQUITY.

USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (5) QUESTIONS: Magic Cleaning Services has a fiscal year end of December 31st. It is in its first year of operations. As of December 31, Magic has the following unadjusted trial balance: Account Debit Credit Cash Accounts Receivable Supplies Building Accounts Payable Unearned Service Revenue $430,900 $ 158,000 $ 90,000 $111,000 $ 46,100 $ 108,000 $ 100,000 -0- $ 619,200 Common Stock Retained Earnings Service Revenue Wage Expense Rent Expense Utilities Expense Administrative Expense TOTALS $ 48,600 $ 12,600 $ 6,200 $ 16,000 $ 873,300 $ 873,300 In addition, Magic has not yet adjusted for the following: 1. The building was purchased on March 1 of the current year. It has a 30-year life, 10% salvage value and Magic uses the straight-line method for depreciation. 2. On April 1, Magic prepaid $12,600 for 12 months of rent on a warehouse. The original entry was recorded as Rent Expense. 3. By December 31st, 40% of the of the services related to the Unearned Revenues had been performed 4. Wages of $4,800 should be accrued and are scheduled to be paid on January 2. 5. Supplies of $75,000 were still on hand at year end. 6. Based on industry averages, it is estimated that 2.5% of the accounts receivable will prove to be uncollectible. Required: To record AJE #2, Magic should do which of the following to record the correct adjustment