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Adjustments and Errors At the end of May, the first month of operations, the following selected data were taken from the financial statements of Julie Mortenson, Attorney at Law, P.C.: $127,500 480,000 150,000 330,000 Net income for May Total assets at May 31 Total liabilities at May 31 Total stockholders' equity at May 31 In preparing the financial statements, adjustments for the following data were overlooked: a1. Unbilled fees earned at May 31, $9,700 a2. Depreciation of equipment for May, $8,000 a3. Accrued wages at May 31, $1,150 a4. Supplies used during May, $975 Instructions: Determine the correct amount of net income for May and the total assets, liabilities, and stockholders' equity at May 31. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by completing the columnar ta below. Adjustment al is presented as an example. Enter account decreases as negative amounts. If your answer is zero, enter "0". Total Assets = Total Liabilities + Total Stockholders' Equity $480,000 $150,000 $330,000 Reported amounts Corrections: Adjustment al Adjustment a2 Adjustment a3 Adjustment a4 Corrected amounts Net Income $ $127,500 9,700 9,700 0 9,700

Adjustments and Errors At the end of May, the first month of operations, the following selected data were taken from the financial statements of Julie Mortenson, Attorney at Law, P.C.: $127,500 480,000 150,000 330,000 Net income for May Total assets at May 31 Total liabilities at May 31 Total stockholders' equity at May 31 In preparing the financial statements, adjustments for the following data were overlooked: a1. Unbilled fees earned at May 31, $9,700 a2. Depreciation of equipment for May, $8,000 a3. Accrued wages at May 31, $1,150 a4. Supplies used during May, $975 Instructions: Determine the correct amount of net income for May and the total assets, liabilities, and stockholders' equity at May 31. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by completing the columnar ta below. Adjustment al is presented as an example. Enter account decreases as negative amounts. If your answer is zero, enter "0". Total Assets = Total Liabilities + Total Stockholders' Equity $480,000 $150,000 $330,000 Reported amounts Corrections: Adjustment al Adjustment a2 Adjustment a3 Adjustment a4 Corrected amounts Net Income $ $127,500 9,700 9,700 0 9,700

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Adjustments and Errors At the end of May, the first month of operations, the following selected data were taken from the financial statements of Julie Mortenson, Attorney at Law, P.C.: Net income for May $127,500 480,000 Total assets at May 31 Total liabilities at May 31 150,000 Total stockholders' equity at May 31 330,000 In preparing the financial statements, adjustments for the following data were overlooked: a1. Unbilled fees earned at May 31, $9,700 a2. Depreciation of equipment for May, $8,000 a3. Accrued wages at May 31, $1,150 a4. Supplies used during May, $975 Instructions: Determine the correct amount of net income for May and the total assets, liabilities, and stockholders' equity at May 31. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by completing the columnar table below. Adjustment a1 is presented as an example. Enter account decreases as negative amounts. If your answer is zero, enter "0". Total Stockholders' Equity $330,000 Reported amounts Corrections: Adjustment al Adjustment a2 Adjustment a3 Adjustment a4 Corrected amounts Net Income $127,500 9,700 Total Assets = Total Liabilities + $480,000 9,700 $150,000 0 9,700
Transcribed Image Text:Adjustments and Errors At the end of May, the first month of operations, the following selected data were taken from the financial statements of Julie Mortenson, Attorney at Law, P.C.: Net income for May $127,500 480,000 Total assets at May 31 Total liabilities at May 31 150,000 Total stockholders' equity at May 31 330,000 In preparing the financial statements, adjustments for the following data were overlooked: a1. Unbilled fees earned at May 31, $9,700 a2. Depreciation of equipment for May, $8,000 a3. Accrued wages at May 31, $1,150 a4. Supplies used during May, $975 Instructions: Determine the correct amount of net income for May and the total assets, liabilities, and stockholders' equity at May 31. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by completing the columnar table below. Adjustment a1 is presented as an example. Enter account decreases as negative amounts. If your answer is zero, enter "0". Total Stockholders' Equity $330,000 Reported amounts Corrections: Adjustment al Adjustment a2 Adjustment a3 Adjustment a4 Corrected amounts Net Income $127,500 9,700 Total Assets = Total Liabilities + $480,000 9,700 $150,000 0 9,700
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