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 $182,600 Total assets at May 31 1,002,000 Total liabilities at May 31 331,000 Total stockholders' equity at May 31 671,000 In preparing the financial statements, adjustments for the following data were overlooked: a. Unbilled fees earned at May 31, $8,890. b. Depreciation of equipment for May, $4,000. c. Accrued wages at May 31, $2,840. d. Supplies used during May, $2,490. 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 setting up and completing a columnar table below. Enter account decreases as negative amounts. If an effect is zero, enter "0". Adjustment (a) is presented as an example. Net Income Total Assets = Total Liabilities + Total Stockholders' Equity Reported amounts: $182,600 $1,002,000 $331,000 $671,000 Corrections: Adjustment (a) 8,890 8,890 8,890 Adjustment (b) Adjustment (c) Adjustment (d) Corrected amounts

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 $182,600 Total assets at May 31 1,002,000 Total liabilities at May 31 331,000 Total stockholders' equity at May 31 671,000 In preparing the financial statements, adjustments for the following data were overlooked: a. Unbilled fees earned at May 31, $8,890. b. Depreciation of equipment for May, $4,000. c. Accrued wages at May 31, $2,840. d. Supplies used during May, $2,490. 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 setting up and completing a columnar table below. Enter account decreases as negative amounts. If an effect is zero, enter "0". Adjustment (a) is presented as an example. Net Income Total Assets = Total Liabilities + Total Stockholders' Equity Reported amounts: $182,600 $1,002,000 $331,000 $671,000 Corrections: Adjustment (a) 8,890 8,890 8,890 Adjustment (b) Adjustment (c) Adjustment (d) Corrected amounts

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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