On December 31, 2020, J. Alan and Company prepared an income statement and balance sheet but...

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On December 31, 2020, J. Alan and Company prepared an income statement and balance sheet but failed to take into account four adjusting journal entries. The income statement, prepared on this incorrect basis, reported income before income tax of $51,000. The balance sheet (before the effect of income taxes) reflected total assets of $153,000, total liabilities of $68,000; and shareholders' equity of $85,000. The data for the four adjusting journal entries follow: a. Depreciation of $13,600 for the year on equipment was not recorded. b. Wages amounting to $28,900 for the last three days of December 2020 were not paid and not recorded (the next payroll will be on January 10, 2021). c. Rent revenue of $8,160 was collected on December 1, 2020, for office space for the three-month period December 1, 2020, to February 28, 2021. The $8,160 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 table to show the effects of the four adjusting journal entries. (Negative amounts should be indicated by a minus sign.) Items Amounts reported a. Effect of depreciation b. Effect of wages c. Effect of rent revenue Adjusted balances Net Income Total Assets Total Liabilities 166,600 $ 51,000 $153,000 $68,000 $ 13,600 13,600 28,900 2,720 96,220 28,900 wwwwwwwwwww Shareholders' Equity 2,720 ******** 99,620 85,000 85,000 On December 31, 2020, J. Alan and Company prepared an income statement and balance sheet but failed to take into account four adjusting journal entries. The income statement, prepared on this incorrect basis, reported income before income tax of $51,000. The balance sheet (before the effect of income taxes) reflected total assets of $153,000, total liabilities of $68,000; and shareholders' equity of $85,000. The data for the four adjusting journal entries follow: a. Depreciation of $13,600 for the year on equipment was not recorded. b. Wages amounting to $28,900 for the last three days of December 2020 were not paid and not recorded (the next payroll will be on January 10, 2021). c. Rent revenue of $8,160 was collected on December 1, 2020, for office space for the three-month period December 1, 2020, to February 28, 2021. The $8,160 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 table to show the effects of the four adjusting journal entries. (Negative amounts should be indicated by a minus sign.) Items Amounts reported a. Effect of depreciation b. Effect of wages c. Effect of rent revenue Adjusted balances Net Income Total Assets Total Liabilities 166,600 $ 51,000 $153,000 $68,000 $ 13,600 13,600 28,900 2,720 96,220 28,900 wwwwwwwwwww Shareholders' Equity 2,720 ******** 99,620 85,000 85,000

Answer rating: 100% (QA)

Adjustments Net INcome Total Assets Total Liability Shareholder Equity Amount Reported 51000 153000 ... View the full answer