On December 31, 2014, Fashion Nugget Company prepared an income statement and balance sheet and failed to take into account three adjusting entries. The incorrect income statement showed net income of $35,000. The balance sheet showed total assets, $115,000; total liabilities, $45,000; and owner's equity, $70,000. The data for the three adjusting entries were: (1) Depreciation of $10,000 was not recorded on equipment. (2) Wages amounting to $7,000 for the last two days in December were not paid and not recorded. The next navroll will be in January Ihe
On December 31, 2014, Fashion Nugget Company prepared an income statement and balance sheet and failed to take into account three adjusting entries. The incorrect income statement showed net income of $35,000. The balance sheet showed total assets, $115,000; total liabilities, $45,000; and owner's equity, $70,000. The data for the three adjusting entries were: (1) Depreciation of $10,000 was not recorded on equipment. (2) Wages amounting to $7,000 for the last two days in December were not paid and not recorded. The next navroll will be in January Ihe
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![On December 31, 2014, Fashion Nugget Company prepared an income statement and balance
sheet and failed to take into account three adjusting entries. The incorrect income statement
showed net income of $35,000. The balance sheet showed total assets, $115,000; total
liabilities, $45,000; and owner's equity, $70,000.
The data for the three adjusting entries were:
(1)
Depreciation of $10,000 was not recorded on equipment.
(2) Wages amounting to $7,000 for the last two days in December were not paid and not recorded.
The next payroll will be in January.
(3)
Rent of $12,000 was paid for two months in advance on December 1. The entire amount was
debited to Rent Expense when paid.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe00076d0-d888-46f1-bcb8-9efe55734fd4%2F565f910e-2706-4d80-a430-7e09e3dd1bdf%2Fz22ltx28_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On December 31, 2014, Fashion Nugget Company prepared an income statement and balance
sheet and failed to take into account three adjusting entries. The incorrect income statement
showed net income of $35,000. The balance sheet showed total assets, $115,000; total
liabilities, $45,000; and owner's equity, $70,000.
The data for the three adjusting entries were:
(1)
Depreciation of $10,000 was not recorded on equipment.
(2) Wages amounting to $7,000 for the last two days in December were not paid and not recorded.
The next payroll will be in January.
(3)
Rent of $12,000 was paid for two months in advance on December 1. The entire amount was
debited to Rent Expense when paid.
![Instructions
Complete the following tabulation to correct the financial statement amounts shown (indicate
deductions with parentheses):
Item
NetIncome
Total Assets
Total Liabilities
Owner's Equity
Incorrect balances
$. 35,000
$115,000
$ 45,000
$ 70,000
Effects of:
Depreciation
Wages
Rent
Correct Balances
| |
|| ||](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe00076d0-d888-46f1-bcb8-9efe55734fd4%2F565f910e-2706-4d80-a430-7e09e3dd1bdf%2F1i2gn9l_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Instructions
Complete the following tabulation to correct the financial statement amounts shown (indicate
deductions with parentheses):
Item
NetIncome
Total Assets
Total Liabilities
Owner's Equity
Incorrect balances
$. 35,000
$115,000
$ 45,000
$ 70,000
Effects of:
Depreciation
Wages
Rent
Correct Balances
| |
|| ||
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