Question

On December 31, 2014, Mica Company prepared a statement of earnings and a statement of financial position but failed to take into account four adjusting entries. The statement of earnings, prepared on this incorrect basis, reflected pretax earnings of $ 30,000. The statement of financial position (before the effect of income taxes) reflected total assets, $ 90,000; total liabilities, $ 40,000; and shareholders’ equity, $ 50,000. The data for the four adjusting entries follow:
a. Depreciation of $ 9,000 for the year on equipment that cost $ 75,000 was not recorded.
b. Wages amounting to $ 17,000 for the last three days of December 2014 were not paid and not recorded (the next pay date is January 10, 2015).
c. An amount of $ 9,600 was collected on December 1, 2014, for rental of office space for the period December 1, 2014, to February 28, 2015. The $ 9,600 was credited in full to deferred rent revenue when collected.
d. Income taxes were not recorded. The income tax rate for the company is 30 percent.
Required:
Complete the following tabulation to correct the financial statements for the effects of the four errors (indicate deductions with parentheses):


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  • CreatedAugust 04, 2015
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