At the end of April, the first month of operations, the following selected data were taken from the financial statements of Beth Cato, an attorney:

Net income for April $125,750

Total assets at April 30 500,000

Total liabilities at April 30 180,000

Total owner's equity at April 30 320,000

In preparing the financial statements, adjustments for the following data were overlooked:

(a) Supplies used during April, $3,100.

(b) Unbilled fees earned at April 30, $18,750.

(c) Depreciation of equipment for April, $2,700.

(d) Accrued wages at April 30, $1,850.

Instructions

1. Journalize the entries to record the omitted adjustments.

2. Determine the correct amount of net income for April and the total assets, liabilities, and owner's equity at April 30. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by setting up and completing a columnar table similar to the following. Adjustment (a) is presented as an example.

Transcribed Image Text:

Total Liabilities + Owner's Equity Total Net Income Total Assets Reported amounts Corrections: Adjustment (a) Adjustment (b) Adjustment (c) Adjustment (d) Corrected amounts $125,750 $320,000 $500,000 $180,000 -3,100 -3,100 -3,100