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CengageNOWv2 l online t. 3 Search 2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker assignments&takeAssignmentSessionLocato; assignment-ti HW Ch3 Calculator Print te EX 3- Effects of Errors on Financial Statements The accountant for Hallmark Medical Co., a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned nue earned during the year ($24,350) and (b) accrued wages ($5,950). 2, EX 3-2 Indicate the effect of each error, considered individually, on the income statement for the current year ended May 31. Also indicate the effect of each error on the May 31 balance sheet. 3, EX.3-3 Enter all amounts as positive numbers. Enter "0" in those spaces where there is no overstatement or no understatement. 4. Ex-3-3.Algo Error (a) The adjusting entry for unearned revenue earned during the year ($24,350) was omitted. 5. EX.3-4.ALGO Overstated Und tated 1. Revenue for the year would be 6. Ex-3-6.Algo 2. Expenses for the year would be 7. Ex-3-7-Algo 3. Net income for the year would be 8. Ex.3-8.Algo 4. Assets at May 31 would be 5. Liabilities at May 31 would be 9, EX 3-9 6. Stockholders' equity at May 31 would be 10. Ex.3-10 Algo Error (b) The adjusting entry for accrued wages ($5,950) was omitted. 11. Ex 3-11 Algo Overstated Und tated 12. Ex.3-13.Algo 1. Revenue for the year would be 13. Ex 3-14 ALGO 2. Expenses for the year would be 3. Net income for the year would be 14. Ex.3-17-Algo 4. Assets at May 31 would be 15. Ex.3-18.Algo 5. Liabilities at May 31 would be 16. EX.319 ALGO 6. Stockholders' equity at May 31 would be 17. EX 3-20 ALGO 18. EX 3-21 ALGO 19. EX.3-22.ALGO 20. EX.3-23 ALGO 21. EX 24 ALGO 22. Ex.3-25-Algo Previous Next Check My Work Progress: 20/26 items Assignment Score: 44.38% Email instructor Save and Exit Submit Assignment for Grading

Explanation / Answer

Error A Unearned Revenue earned during the year $24350` Overstated Understated Revenue for the year woukd be 24350 Expenses for the year would be 0 0 Net Income for the year would be 0 24350 Assets at May 31 0 0 Liabilities at may 31 24350 0 Stockholder Equity at may 31 0 24350 Entry is Unearned Revenue DR Rent revenue Cr B) Accured wages $5950 Overstated Understated Revenue for the year woukd be 5950 0 Expenses for the year would be 0 5950 Net Income for the year would be 5950 0 Assets at May 31 0 0 Liabilities at may 31 0 5950 Stockholder Equity at may 31 5950 0 Wages Expenses Dr Accured Wages Cr If revenue is overstated than the net income is overstated than the stockholder equity is overstated and vice versa

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