20points

Time Remaining 1 hour 28 minutes 38 seconds

01:28:38

Item 2

Time Remaining 1 hour 28 minutes 38 seconds

01:28:38

On December 31, 2017, J. Alan and Company prepared an income statement and balance sheet but failed to take into account four adjusting journal entries. The income statement, prepared on this incorrect basis, reported income before income tax of $37,500. The balance sheet (before the effect of income taxes) reflected total assets of $112,500, total liabilities of $50,000; and shareholders equity of $62,500. The data for the four adjusting journal entries follow:

1. Depreciation of $10,000 for the year on equipment was not recorded.
2. Wages amounting to $21,250 for the last three days of December 2017 were not paid and not recorded (the next payroll will be on January 10, 2018).
3. Rent revenue of $6,000 was collected on December 1, 2017, for office space for the three-month period December 1, 2017, to February 28, 2018. The $6,000 was credited in full to Deferred rent revenue when collected.
4. Income taxes were not recorded and paid. The income tax rate for the company is 30 percent.

Required: Complete the following table to show the effects of the four adjusting journal entries. (Negative amounts should be indicated by a minus sign.)

On December 31, 2017, J. Alan and Company prepared an income statement and balance sheet but failed to take into account four adjusting journal entries. The income statement, prepared on this incorrect basis, reported income before income tax of $37,500. The balance sheet (before the effect of income taxes) reflected total assets of $112,500, total liabilities of $50,000; and shareholders' equity of $62,500. The data for the four adjusting journal entries follow: a. Depreciation of $10,000 for the year on equipment was not recorded. b. Wages amounting to $21,250 for the last three days of December 2017 were not paid and not recorded (the next payroll will be on January 10, 2018). c. Rent revenue of $6,000 was collected on December 1, 2017, for office space for the three-month period December 1, 2017, to February 28, 2018. The $6,000 was credited in full to Deferred rent revenue when collected. d. Income taxes were not recorded and paid. The income tax rate for the company is 30 percent. Required: Complete the following table to show the effects of the four adjusting journal entries. (Negative amounts should be indicated by a minus sign.) Items Net Income Total Assets Total Liabilities Shareholders Equity $ 62,500 $ 37,500 $ 112,500 $ 50,000 Amounts reported a. Effect of depreciation b. Effect of wages c. Effect of rent revenue Adjusted balances d. Effect of Income Taxes Correct amounts