Reference no: EM132996225

Morrow Company's December 31, 2026 unadjusted trial balance reported the following accounts:

Accounts payable ............ $43,000
Accounts receivable ......... $72,000
Advertising expense ......... $21,000
Bonds payable ............... $85,000
Building .................... $67,000
Cash ........................ $18,000
Common stock ................ $45,000
Cost of goods sold .......... $41,000
Income tax expense .......... $15,000
Interest revenue ............ $33,000
Inventory ................... $54,000
Loss on sale of land ........ $13,000
Retained earnings ........... $39,000 (at January 1, 2026)
Sales revenue ............... $91,000
Trademark ................... $57,000
Unearned revenue ............ $48,000
Wage expense ................ $26,000

Morrow Company has not yet recorded adjusting entries related to the following two items:

1) Morrow Company received a $7,000 utility bill on December 31, 2026 for utility usage in 2026. However, Morrow Company will not pay the bill until January, 2027.

2) The unearned revenue listed above relates to a $48,000 payment from a customer that Morrow received on June 1, 2026. The payment was for work to be performed each month for the next 20 months, beginning in June, 2026.

Problem 1: Calculate the amount of net income that Morrow Company would report in its 2026 income statement after the appropriate adjusting entries have been recorded and posted.