At the end of April, the first month of operations, the following selected data were taken from the…

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

________

________

________

________

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