1. Prepaid rent for one year on January 1, 2019, in the amount of $26,400. Record the adjustment on January 31, 2019. 2. Purchased supplies for $1,600 on January 1, 2019. The inventory of supplies was $400 on January 31, 2019. Record the adjustment for the amount of the supplies that were used during the month of January 2019. Depreciation is computed using the straight-line method. 3. Equipment purchased on January 1, 2019, for $36,000 has an estimated useful life of 6 years with no salvage value. Record the adjustment on January 31, 2019. 4. Signed a 12-month contract for $3,000 of prepaid advertising on January 1, 2019. Record the adjustment for the amount of the advertising contract that expired during the month of January 2019.

Magic realm, inc., has developed a new fantasy board game. the company sold 15,000 games last year at a selling price of $20 per game. fixed expenses associated with the game total $182,000 per year, and variable expenses are $6 per game. production of the game is entrusted to a printing contractor. variable expenses consist mostly of payments to this contractor.required: 1-a. prepare a contribution format income statement for the game last year.1-b. compute the degree of operating leverage.2. management is confident that the company can sell 58,880 games next year (an increase of 12,880 games, or 28%, over last year). given this assumption: a. what is the expected percentage increase in net operating income for next year? b. what is the expected amount of net operating income for next year? (do not prepare an income statement; use the degree of operating leverage to compute your answer.)