At the end of October, the first month of operations, the following selected data were taken from the financial statements of Lauren Powell, an attorney:

Net income for October .........$ 99,480

Total assets at October 31 ........ 400,000

Total liabilities at October 31 ........ 100,000

Total owner's equity at October 31 ..... 300,000

In preparing the financial statements, adjustments for the following data were overlooked:

a. Unbilled fees earned at October 31, $8,000.

b. Depreciation of equipment for October, $5,500.

c. Accrued wages at October 31, $2,500.

d. Supplies used during October, $1,725.

Instructions

1. Journalize the entries to record the omitted adjustments.

2. Determine the correct amount of net income for October and the total assets, liabilities, and owner's equity at October 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 anexample.

Transcribed Image Text:

Total Total Total Owner's Equity $300,000 Net Income Assets ablities owner's Equlity Reported amounts $99,480 400,000 $100,000 Corrections Adjustment (a) Adjustment (b) Adjustment (c) Adjustment (d) Corrected amounts +8,000 +8,000 +8,000