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On December 31, 2014, Fawzi Company prepared an income statement and balance sheet and failed to take into account four adjusting entries. The income statement,

On December 31, 2014, Fawzi Company prepared an income statement and balance sheet and failed to take into account four adjusting entries. The income statement, prepared on this incorrect basis, reflected pretax income of $67,000. The balance sheet (before the effect of income taxes) reflected total assets, $178,000; total liabilities, $76,000; and stockholders equity, $102,000. The data for the four adjusting entries follow:

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a. Wages amounting to $38,000 for the last three days of December 2014 were not paid and not recorded b b. Depreciation of $8,000 for the year on equipment that cost $178,000 was not recorded. c. Rent revenue of $11,700 was collected on December 1, 2014, for office space for the period December ia roay or s800 for hear on 2qupment that cost $178,00 was not recorded. 1.2014, to February 28, 2015. The $11,700 was credited in full to Unearned Rent Revenue when d. Income taxes were not recorded. The income tax rate for the company is 30 percent. Required Complete the following tabulation to correct the financial statements for the effects of the four errors. (Amounts to be deducted should be indicated with a minus sign.) Total Net Income Total Assets Liabilities Stockholders Equity Items Balances reported $ 67,000 1 78,000 76,0 00 S 102,000 Additional adjustments a.Wage:s b. Depreciation c. Rent revenue Adjusted balances d. Income taxes Correct balances

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