At the end of March, the first month of operations, the following selected data were taken from
Question:
At the end of March, the first month of operations, the following selected data were taken from the financial statements of Kurt Reibel, an attorney:
Net income for March ......... $ 150,000
Total assets at March 31 ........ 1,000,000
Total liabilities at March 31 ........ 350,000
Total owner's equity at March 31 ..... 650,000
In preparing the financial statements, adjustments for the following data were overlooked:
a. Unbilled fees earned at March 31, $15,000.
b. Depreciation of equipment for March, $9,000.
c. Accrued wages at March 31, $3,500.
d. Supplies used during March, $2,000.
Instructions
1. Journalize the entries to record the omitted adjustments.
2. Determine the correct amount of net income for March and the total assets, liabilities, and owner's equity at March 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 following. Adjustment (a) is presented as anexample.
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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:
1 a Accounts Receivable 15000 Fees Earned 15000 Accrued fees earned b Depreciation Expense 9000 Accu...View the full answer
