Frontland Advertising creates, plans, and handles advertising campaigns in a three-state area. Recently, Frontland had to replace an inexperienced office worker in charge of bookkeeping because of some serious mistakes that had been uncovered in the accounting records. You have been hired to review these transactions to determine any corrections that might be necessary. In all cases, the bookkeeper made an accurate description of the transaction.

Requirements
1. For each of the preceding entries, indicate the effect of the error on cash, total assets, and net income. The answer for the first transaction has been provided as an example.

2. What is the correct balance of cash if the balance of cash on the books before correcting the preceding transactions was $6,400?
3. What is the correct amount of total assets if the total assets on the books before correcting the preceding transactions was $28,000?
4. What is the correct net income for May if the reported income before correcting the preceding transactions was $8,000?

A1 1 May 1 Accounts receivable 100 Service revenue 100 Collected an account receivable. 2 Rent expense 0,000 Cash 20,000 Paid monthly rent, $2,000 5 Cash 2,800 Accounts receivable 2,800 Collected cash for services provided 12 13 14 15 16 17 18 19 10 Supplies 3,100 Accounts payable 3,100 Purchased office equipment on account 16 Dividends Cash 5600 5,600 Paid salaries 21 25 Accounts receivable 5400 Cash 5400 Paid for supplies purchased earlier on account 23 24 Date Effect on Cash Effect on' Total Assets Effect on Net Income May 1 Understated $100 Overstated $100 Overstated $100