Question: At the end of December the first year of operations

At the end of December, the first year of operations, the following selected data were taken from the financial statements of Monita Forche, a lawyer:
Net income for year ............ $135,800
Total assets at December 31 ........ 750,000
Total liabilities at December 31 ........ 250,000
Total owner’s equity at December 31 ..... 500,000
In preparing the financial statements, adjustments for the following data were overlooked:
a. Unbilled fees earned at December 31, $6,700.
b. Depreciation of equipment for December, $3,000.
c. Accrued wages at December 31, $2,150.
d. Supplies used during December, $1,975.
1. Journalize the entries to record the omitted adjustments.
2. Determine the correct amount of net income for the year and the total assets, liabili ties, 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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