At the end of April, the first month of operations, the following selected data
ID: 2419590 • 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:
Net income for April
$102,000
Total assets at April 30
736,400
Total liabilities at April 30
284,750
Total owner’s equity at April 30
451,650
In preparing the financial statements, adjustments for the following data were overlooked:
a. Supplies used during April, $3,200.
b. Unbilled fees earned at April 30, $22,700.
c. Depreciation of equipment for April, $2,000.
d. Accrued wages at April 30, $1,450.
Corrected Amounts
1
Net Income
Total Assets =
Total Liabilities +
Total Owner’s Equity
2
Reported amounts
$102,000.00
$736,400.00
$284,750.00
$451,650.00
3
Corrections:
4
Adjustment (a)
(3,200.00)
(3,200.00)
0.00
(3,200.00)
5
Adjustment (b)
6
Adjustment (c)
7
Adjustment (d)
8
Corrected amounts
. Journalize the entries on April 30 to record the omitted adjustments. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
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".)
Corrected Amounts
1
Net Income
Total Assets =
Total Liabilities +
Total Owner’s Equity
2
Reported amounts
$102,000.00
$736,400.00
$284,750.00
$451,650.00
3
Corrections:
4
Adjustment (a)
(3,200.00)
(3,200.00)
0.00
(3,200.00)
5
Adjustment (b)
6
Adjustment (c)
7
Adjustment (d)
8
Corrected amounts
Net income for April
$102,000
Total assets at April 30
736,400
Total liabilities at April 30
284,750
Total owner’s equity at April 30
451,650
Explanation / Answer
1. Journal entries
2. Statement showing corrected amounts
S.No Account title and explanation Debit credit a. Supplies expense 3200 Supplies in store 3200 b. Accounts recievable 22700 Revenue 22700 c. Depreciation expenses 2000 Accumulated depreciation 2000 d. Wages expenses 1450 Wages payable 1450Related Questions
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