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