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

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

________

________

________

________

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