Question: At the end of May the first month of operations

At the end of May, the first month of operations, the following selected data were taken from the financial statements of Julie Mortenson, Attorney at Law, P.C.:
Net income for May ....... $127,500
Total assets at May 31 ........ 480,000
Total liabilities at May 31 ....... 150,000
Total stockholders’ equity at May 31 . 330,000

In preparing the financial statements, adjustments for the following data were overlooked:
a. Unbilled fees earned at May 31, $9,700
b. Depreciation of equipment for May, $8,000
c. Accrued wages at May 31, $1,150
d. Supplies used during May, $975

Determine the correct amount of net income for May and the total assets, liabilities, and stockholders’ equity at May 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 one shown below. Adjustment (a) is presented as anexample.

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  • CreatedFebruary 04, 2014
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