Effects of Errors on Financial Statements The accountant for Astaire Medical Co., a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($23,250) and (b) accrued wages ($4,000). Indicate the effect of each error, considered individually, on the income statement for the current year ended August 31. Also indicate the effect of each error on the August 31 balance sheet. Enter all amounts as positive numbers. Enter "0" in those spaces where there is no overstatement or no understatement. Error (a) The adjusting entry for unearned revenue earned during the year ($23,250) was omitted.

(a) Preparation of adjusting entry for unearned revenue earned during the year.We have,

Particulars	Overstated	Understated
Revenue for the year would be
Expenses for the year would be
Net income for the year would be
Assets at August 31 would be
Liabilities at August 31 would be
Stockholders' equity at August 31 would be

(b) Preparation of adjusting entry for accrued wages earned during the year.We have,

Particulars	Overstated	Understated
Revenue for the year would be
Expenses for the year would be
Net income for the year would be
Assets at August 31 would be
Liabilities at August 31 would be
Stockholders' equity at August 31 would be