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On December 31, 2017, Carla Vista Co. prepared an income statement and balance sheet, but failed to take into account three adjustments. The balance sheet
On December 31, 2017, Carla Vista Co. prepared an income statement and balance sheet, but failed to take into account three adjustments. The balance sheet showed total assets $135,000, total liabilities $63,000, and stockholders' equity $72,000. The incorrect income statement showed net income of $63,000. The data for the three adjustments were: Salaries and wages amounting to $9,000 for the last 2 days in December were not paid and not recorded. The next payroll will be in 1. January 2. Rent payments of $7,200 was received for two months in advance on December 1. The entire amount was recorded as Unearned Rent Revenue when received. Depreciation expense for 2017 is $8,100. 3. Complete the following table to correct the financial statement amounts shown (indicate deductions with parentheses). Item Net Income Total Assets Total Liabilities Stockholders' Equity Incorrect balances $63,000 $135,000 $63,000 $72,000 Effects of: Salaries and Wages Rent Revenue Depreciation Correct balances $ $ $
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