122 Chapter 3 TotalToalTotal Stockholders Net Income Equity $500,000 Liabilities $250,000 Reported amounts $135,800 $750,000 6,700 6,700 +6,700 Adjustment (a) Adjustment (b) Adjustment (d) Corrected amounts Adjustment data for Magnum Therapeutics Inc. for the year ended May 31, 2011, are as follows: a. Wages accrued but not paid at May 31, $1,800 b. Depreciation of equipment during the year, S 12,500 C. Laundry supplies on hand at May 31, $1,900 d. Insurance premiums expired, $5,500 P3-6 dustment process and financial statements SPREADSHEET 2. Net income, $122,600 Instructions 1. Using the following integrated financial statement framework, record each adjustment to the appropriate accounts, identifying each adjustment by its letter. After all adjustments are recorded, determine the balances. Balance Sheet Liabilies +Stockholders' Equity Income Statement of Cash Flows Loundry Prepaid Lawndy Ace. Accts.Wages Capital Retained Cesh+ Sapplieslesuronce Epepre Payabl+Payabe Stock +Earning 0 50,000 196,00 Balances, May 31, 2011 48,000 9,000 6,000 250,000 60,000 7,000 Income Statement Laundry revence 315,000 Wages expense -110,000 Rent expense 30,000 Utilities expense 18,000 Misc. expense Statement of Cesh Flow Operating (Revenue) Financing (Capital Soock) Operating (Expenses Invwiting (Eqeipment) Financing (Dwidends) Net increase in cash Beginning cash bulance, June 1,2010 13,00 Ending cash balance,May 31,2011 548,000 315,000 25,000 220,000 80,000 5,000 35,000 -7,500 2. Prepare an income statement and retained earnings statement for the year ended May 31, 2011. The retained earnings balance as of June 1, 2010, was $51,500. 3. Prepare a classified balance sheet as of May 31, 2011. 4. Prepare a statement of cash flows for the year ended May 31, 2011. 122 Chapter 3 TotalToalTotal Stockholders Net Income Equity $500,000 Liabilities $250,000 Reported amounts $135,800 $750,000 6,700 6,700 +6,700 Adjustment (a) Adjustment (b) Adjustment (d) Corrected amounts Adjustment data for Magnum Therapeutics Inc. for the year ended May 31, 2011, are as follows: a. Wages accrued but not paid at May 31, $1,800 b. Depreciation of equipment during the year, S 12,500 C. Laundry supplies on hand at May 31, $1,900 d. Insurance premiums expired, $5,500 P3-6 dustment process and financial statements SPREADSHEET 2. Net income, $122,600 Instructions 1. Using the following integrated financial statement framework, record each adjustment to the appropriate accounts, identifying each adjustment by its letter. After all adjustments are recorded, determine the balances. Balance Sheet Liabilies +Stockholders' Equity Income Statement of Cash Flows Loundry Prepaid Lawndy Ace. Accts.Wages Capital Retained Cesh+ Sapplieslesuronce Epepre Payabl+Payabe Stock +Earning 0 50,000 196,00 Balances, May 31, 2011 48,000 9,000 6,000 250,000 60,000 7,000 Income Statement Laundry revence 315,000 Wages expense -110,000 Rent expense 30,000 Utilities expense 18,000 Misc. expense Statement of Cesh Flow Operating (Revenue) Financing (Capital Soock) Operating (Expenses Invwiting (Eqeipment) Financing (Dwidends) Net increase in cash Beginning cash bulance, June 1,2010 13,00 Ending cash balance,May 31,2011 548,000 315,000 25,000 220,000 80,000 5,000 35,000 -7,500 2. Prepare an income statement and retained earnings statement for the year ended May 31, 2011. The retained earnings balance as of June 1, 2010, was $51,500. 3. Prepare a classified balance sheet as of May 31, 2011. 4. Prepare a statement of cash flows for the year ended May 31, 2011