At the end of October, the first month of operations, thefollowing selected data were taken from the financial statements ofMichael Han, Attorney-at-law, P.C.
Net income forOctober $240,000
Total assets at October31 750,000
Total liabilities at October31 250,000
Total stockholders' equity at October31 500,000
In preparing the financial statements, adjustments for thefollowing data were overlooked:
a. Unbilled fees earned atOctober 31, $12,000.
b. Depreciation of equipment forOctober, $4,000.
c. Accrued wages at October31, $3,100.
d. Supplies used during October,$1,250.
Instructions:
Determine the correct amount of net income for October and thetotal assets, liabilities, and stockholders' equity atOctober 31. In addition to indicating the corrected amounts,indicate the effect of each omitted adjustment by setting up andcompleting a columnar table similar to thefollowing. Adjustment (a) is presented as an example.
Net Total Total Total Stockholders'
Income Assets Liabilities Equity
Reportedamounts $240,000 $750,000 $250,000 $500,000
Corrections:
Adjustment(a) +12,800 +12,800 0 +12,800
Adjustment(b) ? ? ? ?
Adjustment(c) ? ? ? ?
Adjustment(d) ? ? ? ?
CorrectedAmounts ? ? ? ?