Question: The following data at July 31, 2018, are given for RCO: a. Depreciation, $600. b. Prepaid rent expires, $200. c. Interest expense accrued, $700. d.

The following data at July 31, 2018, are given for RCO:

a. Depreciation, $600.

b. Prepaid rent expires, $200.

c. Interest expense accrued, $700.

d. Employee salaries owed for Monday through Thursday of a five-day workweek; weekly payroll, $8,000.

e. Unearned revenue earned, $1,000.

f. Office supplies used, $150.

Requirements

1. Journalize the adjusting entries needed on July 31, 2018.

2. Suppose the adjustments made in Requirement 1 were not made. Compute the overall overstatement or understatement of net income as a result of the omission of these adjustments.

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