Question

At the end of December, the first month of operations, the following selected data were taken from the financial statements of Beth Cato, a lawyer:
Net income for December .............$125,750
Total assets at December 31 ............500,000
Total liabilities at December 31 ............180,000
Total owner’s equity at December 31 .........320,000
In preparing the financial statements, adjustments for the following data were overlooked:
a. Supplies used during December, $3,100.
b. Unbilled fees earned at December 31, $18,750.
c. Depreciation of equipment for December, $2,700.
d. Accrued wages at December 31, $1,850.
Instructions
1. Journalize the entries to record the omitted adjustments.
2. Determine the correct amount of net income for the year and the total assets, liabilities, and owner’s equity at December 31. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by setting up and completing a columnar table similar to the following. Adjustment (a) is presented as an example.


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  • CreatedSeptember 15, 2015
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