At the end of April, the first month of operations, the following selected data were taken from the…
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At the end of April, the first month of operations, the following selected data were taken from the financial statements of Phil Olson, P.C., a professional services corporation owned and operated by Phil Olson, an attorney at law:
Net income for April
$187,500
Total assets at April 30
498,300
Total liabilities at April 30
67,800
Total stockholders’ equity at April 30
430,500
In preparing the statements, adjustments for the following data were overlooked:
a. Unbilled fees earned at April 30, $21,500.
b. Depreciation of equipment for April, $6,000.
c. Accrued wages at April 30, $2,900.
d. Supplies used during April, $1,875.
Instructions
Determine the correct amount of net income for April and the total assets, liabilities, and stockholders’ equity at April 30. 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
$187,500
$498,300
$67,800
$430,500
Corrections:
Adjustment (a)
_21,500
_21,500
0
_21,500
Adjustment (b)
________
________
________
________
Adjustment (c)
________
________
________
________
Adjustment (d)
________
________
________
________
Corrected amounts
________
________
________
________