At the end of July, the first month of operations, the following selected data were taken from
Question:
At the end of July, the first month of operations, the following selected data were taken from the financial statements of Monita Forche, Attorney at Law, P.C.:
Net income for July $135,800
Total assets at July 31 750,000
Total liabilities at July 31 250,000
Total stockholders' equity at July 31 500,000
In preparing the financial statements, adjustments for the following data were overlooked:
a. Unbilled fees earned at July 31, $6,700
b. Depreciation of equipment for July, $3,000
c. Accrued wages at July 31, $2,150
d. Supplies used during July, $1,975
Instructions
Determine the correct amount of net income for July and the total assets, liabilities, and stockholders' equity at July 31. 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 one shown at the top of the following page. Adjustment (a) is presented as anexample.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Reported amounts Corrections Adjustment a Adjustment b Adj...View the full answer
