EX 3-23 Effects of errors on financial statements Obj. 2, 3,5 The accountant for Healthy Life Company, a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($34,900) and (b) accrued wages ($12,770). Indicate the effect of each error, considered individually, on the income state ment for the current year ended July 31. Also indicate the effect of each error on the July 31 palance sheet Set up a table similar to the following, and record your answers by inserting the dollar amount in the appropriate spaces. Insert a zero if the error does not affect the item 1. Revenue for the year would be 2. Expenses for the year would be 3. Net income for the year would be 4. Assets at July 31 would be 5. Liabilities at July 31 would be 6. Stockholders' equity at July 31 would be Error (a) Over Under- stated stated $ $ $ $ $ $ $ $ $ $ $ $ Error (b) Over Under- stated stated $ $ $ $ $ $ $ EX 3-23 Effects of errors on financial statements Obj. 2, 3,5 Error (b) Over Under- stated stated Error (a) Over Under- stated stated 1. Revenue for the year would be $ $ 2. Expenses for the year would be $ $ 3. Net income for the year would be 4. Assets at July 31 would be $ $ 5. Liabilities at July 31 would be $ $ 6. Stockholders' equity at July 31 would be $ __ $ $ $ $ $ adjusting entries for (a) unearned revenue earned during the year ($34,900) and (b) accrued The accountant for Healthy Life Company, a medical services consulting firm, mistakenly omitted ment for the current year ended July 31. Also indicate the effect of each error on the July 31 wages ($12,770). Indicate the effect of each error, considered individually, on the income state- balance sheet. Set up a table similar to the following, and record your answers by inserting the dollar amount in the appropriate spaces. Insert a zero if the error does not affect the item