At the end of March, the first month of operations, the following selected data were taken from the financial statements of Rita Abbott, P.C., a professional services corporation owned and operated by Rita Abbott, an attorney at law:
|
Net income for March |
$372,300 |
Total liabilities at March 31 |
158,500 |
|
Total assets at March 31 |
862,000 |
Total stockholders’ equity at March 31 |
703,500 |
In preparing the statements, adjustments for the following data were overlooked:
a. Unbilled fees earned at March 31, $10,100.
b. Depreciation of equipment for March, $7,500.
c. Accrued wages at March 31, $2,100.
d. Supplies used during March, $1,375.
Instructions
Determine the correct amount of net income for March and the total assets, liabilities, and stockholders’ equity at March 31. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by setting up and completing a columnar table similar to the following. Adjustment (a) is presented as an example.
|
|
|
|
Total |
|
|
Net |
Total |
Total |
Stockholders’ |
|
|
Income |
Assets |
Liabilities |
Equity |
|
|
Reported amounts |
$372,300 |
$862,000 |
$158,500 |
$703,500 |
|
Corrections: |
|
|
|
|
|
Adjustment (a) |
_10,100 |
_10,100 |
0 |
_10,100 |
|
Adjustment (b) |
________ |
________ |
________ |
________ |
|
Adjustment (c) |
________ |
________ |
________ |
________ |
|
Adjustment (d) |
________ |
________ |
________ |
________ |
|
Corrected amounts |
________ |
________ |
________ |
________ |