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entify the 12 errors in the financial statement and explain why they are incorrect.

entify the 12 errors in the financial statement and explain why they are incorrect.

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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Identify the 12 errors in the financial statement and explain why they are incorrect.
Eric Wocd, CPA, was organized on January 1, 2015, as a proprietorship. List the 12 errors that you find in the following financial statements for the three months ended March 31, 2015. Eric Wood, CPA Income Statement For the Three Months Fnded March 31, 2015 Fees eamed Operating expenses: Salary expense Ret Wages expense Utilities expense Miscellaneous expense Answering service expense Supplies expense Total operating expenses Net income $42,000 $9,735 5,200 3,950 3,225 4,000 2,550 4.000 expense 28.000 $14,000 Eric Wood, CPA Statement of Owner's Equity March 31, 2015 Eric Wood, capital, January, 1, 2015 Investment on January 1, 2015 Net income for the 3 months $20,000 14.000 36,000 5,000 Less withdrawals Increase in owner's equity Eric Wood, capital, March 31, 2015 31,000 $31.000 Balance Sheet For the Three Months Ended March 31, 2015 Assets Owner's Equity Land $13,000 Eric Wocd, capital 10,860 2,670 Accounts receivable 925 $33,225 $31,000 Cash Accounts payable Supplies Total assets Liabilities 2,225 Total labilties and owner's equity $33,225
Transcribed Image Text:Eric Wocd, CPA, was organized on January 1, 2015, as a proprietorship. List the 12 errors that you find in the following financial statements for the three months ended March 31, 2015. Eric Wood, CPA Income Statement For the Three Months Fnded March 31, 2015 Fees eamed Operating expenses: Salary expense Ret Wages expense Utilities expense Miscellaneous expense Answering service expense Supplies expense Total operating expenses Net income $42,000 $9,735 5,200 3,950 3,225 4,000 2,550 4.000 expense 28.000 $14,000 Eric Wood, CPA Statement of Owner's Equity March 31, 2015 Eric Wood, capital, January, 1, 2015 Investment on January 1, 2015 Net income for the 3 months $20,000 14.000 36,000 5,000 Less withdrawals Increase in owner's equity Eric Wood, capital, March 31, 2015 31,000 $31.000 Balance Sheet For the Three Months Ended March 31, 2015 Assets Owner's Equity Land $13,000 Eric Wocd, capital 10,860 2,670 Accounts receivable 925 $33,225 $31,000 Cash Accounts payable Supplies Total assets Liabilities 2,225 Total labilties and owner's equity $33,225
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