The accountant for Maxim Medical Co., a medical services consulting firm, mistakenly omitted adjustments for (a) unearned revenue ($10,390) and (b) accrued wages ($2,440). (a) Indicate the effect of each error, considered individually, on the income statement for the current year ended December 31. Also indicate the effect of each error on the December 31 balance sheet. Set up a table similar to the following, and record your answers by inserting the dollar amount in the appropriate spaces. Insert a zero if the error does not affect the item.

  Error (a)

 

Error (b)

 

Over- stated

Under- stated

Over- stated

Under- stated

1. Revenue for the year would be

$

$

$

$

2. Expenses for the year would be

$

$

$

$

3. Net income for the year would be

$

$

$

$

4. Assets at December 31 would be

$

$

$

$

5. Liabilities at December 31 would be

$

$

$

$

6. Stockholders’ equity at December 31 would be

$

$

$

$

(b) If the net income for the current year had been $437,720, what would be the correct net income if the proper adjustments had been made?