The accountant for Healthy Life Company, a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($34,900) and (b) accrued wages ($12,770). Indicate the effect of each error, considered individually, on the income state- ment for the current year ended July 31. Also indicate the effect of each error on the July 31 balance sheet. Set up a table similar to the following, and record your answers by inserting the dollar amount in the appropriate spaces. Insert a zero if the error does not affect the item. Error (a) Error (b) Under- stated Over- stated Under- stated Over- stated $. 1. Revenue for the year would be 2. Expenses for the year would be 3. Net income for the year would be 4. Assets at July 31 would be 5. Liabilities at July 31 would be 6. Stockholders'equity at July 31 would be 2$ 2$ 24 2$ $. $. $. 24 2$ $. $. Obj. 2, 3, 5 EX 3-24 Effects of errors on financial statements If the net income for the current year had been $196,400 in Exercise 3-23, what would have been the correct net income if the proper adjusting entries had been made? %24 %24 %is %24
The accountant for Healthy Life Company, a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($34,900) and (b) accrued wages ($12,770). Indicate the effect of each error, considered individually, on the income state- ment for the current year ended July 31. Also indicate the effect of each error on the July 31 balance sheet. Set up a table similar to the following, and record your answers by inserting the dollar amount in the appropriate spaces. Insert a zero if the error does not affect the item. Error (a) Error (b) Under- stated Over- stated Under- stated Over- stated $. 1. Revenue for the year would be 2. Expenses for the year would be 3. Net income for the year would be 4. Assets at July 31 would be 5. Liabilities at July 31 would be 6. Stockholders'equity at July 31 would be 2$ 2$ 24 2$ $. $. $. 24 2$ $. $. Obj. 2, 3, 5 EX 3-24 Effects of errors on financial statements If the net income for the current year had been $196,400 in Exercise 3-23, what would have been the correct net income if the proper adjusting entries had been made? %24 %24 %is %24
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I will send you 2 exercises but the one I will need is 3-24 because you have to use 3-23 as an example to do 3-24.
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