At the end of April, the first month of operations, the following selected data
ID: 2409488 • Letter: A
Question
At the end of April, the first month of operations, the following selected data were taken from the financial statements of Shelby Crawford, an attorney:
In preparing the financial statements, adjustments for the following data were overlooked:
1. Journalize the entries on April 30 to record the omitted adjustments. Refer to the Chart of Accounts for exact wording of account titles.
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PAGE 10
JOURNAL
ACCOUNTING EQUATION
Score: 101/101
1
Adjusting Entries
2
?
?
?
3
?
?
4
?
?
?
5
?
?
6
?
?
?
7
?
?
8
?
?
?
9
?
?
2. Determine the correct amount of net income for April and the total assets, liabilities, and owner’s equity at April 30. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment using the columnar table provided. Adjustment (a) is presented as an example. (Note: Use a minus sign (-) to indicate a decrease. If there is no amount or an amount is zero, enter "0".)
Score: 39/64
Corrected Amounts
1
Net Income
Total Assets =
Total Liabilities +
Total Owner’s Equity
2
Reported amounts
$120,000.00
$750,000.00
$300,000.00
$450,000.00
3
Corrections:
4
Supplies used
(2,750.00)
(2,750.00)
0.00
(2,750.00)
5
Unbilled fees earned
?
?
6
Equipment depreciation
?
?
7
Accrued wages
?
?
8
Corrected amounts
?
?
?
Net income for April $120,000 Total assets at April 30 750,000 Total liabilities at April 30 300,000 Total owner’s equity at April 30 450,000Explanation / Answer
Answers
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
1
Adjusting Entries
2
30-Apr
Supplies expense
$ 2,750.00
$ (2,750.00)
3
Supplies
$ 2,750.00
$ (2,750.00)
4
30-Apr
Accounts receivables
$ 23,700.00
$ 23,700.00
5
Fees Earned
$ 23,700.00
$ 23,700.00
6
30-Apr
Depreciation expense
$ 1,800.00
$ (1,800.00)
7
Accumulated Depreciation Equipment
$ 1,800.00
$ (1,800.00)
8
30-Apr
Wages Expense
$ 1,400.00
$ (1,400.00)
9
Wages payable
$ 1,400.00
$ 1,400.00
Corrected Amounts
1
Net Income
Total Assets =
Total Liabilities +
Total Owner’s Equity
2
Reported amounts
$ 1,20,000.00
$ 7,50,000.00
$ 3,00,000.00
$ 4,50,000.00
3
Corrections:
4
Supplies used
$ (2,750.00)
$ (2,750.00)
$ -
$ (2,750.00)
5
Unbilled fees earned
$ 23,700.00
$ 23,700.00
$ -
$ 23,700.00
6
Equipment depreciation
$ (1,800.00)
$ (1,800.00)
$ -
$ (1,800.00)
7
Accrued wages
$ (1,400.00)
$ -
$ 1,400.00
$ (1,400.00)
8
Corrected amounts
$ 1,37,750.00
$ 7,69,150.00
$ 3,01,400.00
$ 4,67,750.00
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
1
Adjusting Entries
2
30-Apr
Supplies expense
$ 2,750.00
$ (2,750.00)
3
Supplies
$ 2,750.00
$ (2,750.00)
4
30-Apr
Accounts receivables
$ 23,700.00
$ 23,700.00
5
Fees Earned
$ 23,700.00
$ 23,700.00
6
30-Apr
Depreciation expense
$ 1,800.00
$ (1,800.00)
7
Accumulated Depreciation Equipment
$ 1,800.00
$ (1,800.00)
8
30-Apr
Wages Expense
$ 1,400.00
$ (1,400.00)
9
Wages payable
$ 1,400.00
$ 1,400.00
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