The accountant for Healthy Life Company, a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($34,900) and (b) accrued wages ($12,770). Indicate the effect of each error, considered individually, on the income statement for the current year ended July 31. Also indicate the effect of each error on the July 31 balance sheet. Set up a table similar to the following, and record your answers by inserting the dollar amount in the appropriate spaces. Insert a zero if the error does not affect the item. Error (b) Error (a) Under- stated Under- stated Over- Over- stated stated 1. Revenue for the year would be 2$ 24 2. Expenses for the year would be 2$ 2$ 24 24 3. Net income for the year would be 4. Assets at July 31 would be 2$ 2$ 2$ 2$ 24 24 5. Liabilities at July 31 would be 6. Owner's equity at July 31 would be 2$ 2$

The accountant for Healthy Life Company, a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($34,900) and (b) accrued wages ($12,770). Indicate the effect of each error, considered individually, on the income statement for the current year ended July 31. Also indicate the effect of each error on the July 31 balance sheet. Set up a table similar to the following, and record your answers by inserting the dollar amount in the appropriate spaces. Insert a zero if the error does not affect the item. Error (b) Error (a) Under- stated Under- stated Over- Over- stated stated 1. Revenue for the year would be 2$ 24 2. Expenses for the year would be 2$ 2$ 24 24 3. Net income for the year would be 4. Assets at July 31 would be 2$ 2$ 2$ 2$ 24 24 5. Liabilities at July 31 would be 6. Owner's equity at July 31 would be 2$ 2$

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter2: Service Company Worksheet (f1work)

Section: Chapter Questions

Problem 1R: The trial balance of Wikki Cleaners at December 31, 2012, the end of the current fiscal year, is as...

See similar textbooks

Similar questions

At the end of April, the first month of operations, the following selected data were taken from the financial statements of Shelby Crawford, an attorney: In preparing the financial statements, adjustments for the following data were overlooked: Supplies used during April, 2,750. Unbilled fees earned at April 30, 23,700. Depreciation of equipment for April, 1,800. Accrued wages at April 30, 1,400. Instructions 1. Journalize the entries to record the omitted adjustments. 2. Determine the correct amount of net income for April and the total assets, liabilities, and owners 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. The adjustment for supplies used is presented as an example.
The trial balance of Wikki Cleaners at December 31, 2012, the end of the current fiscal year, is as follows: Information for the adjusting entries is as follows: a. Cleaning supplies on hand on December 31, 2012, 18,750. b. Insurance premiums expired during the year, 1,800. c. Depreciation on equipment during the year, 21,600. d. Wages accrued but not paid at December 31, 2012, 1,830. As the accountant for Wikki Cleaners, you have been asked to prepare financial statements for the year. A file called F1WORK has been provided to assist you in this assignment. As you review this file, it should be noted that columns H and I will automatically change when you enter values in columns E or G.
At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2 years: Reported net income was 27,000 in 2018 and 35,000 in 2019. The allowance for doubtful accounts had a zero balance at the beginning of 2018. No accounts were written off during 2018 or 2019. Ignore income taxes. Required: 1. What is the correct net income for 2018 and 2019? 2. Prepare the adjusting journal entry in 2020 to correct the errors.
The following accounts appear in the ledger of Celso and Company as of June 30, the end of this fiscal year. The data needed for the adjustments on June 30 are as follows: ab.Merchandise inventory, June 30, 54,600. c.Insurance expired for the year, 475. d.Depreciation for the year, 4,380. e.Accrued wages on June 30, 1,492. f.Supplies on hand at the end of the year, 100. Required 1. Prepare a work sheet for the fiscal year ended June 30. Ignore this step if using CLGL. 2. Prepare an income statement. 3. Prepare a statement of owners equity. No additional investments were made during the year. 4. Prepare a balance sheet. 5. Journalize the adjusting entries. 6. Journalize the closing entries. 7. Journalize the reversing entry as of July 1, for the wages that were accrued in the June adjusting entry. Check Figure Net income, 14,066
At the end of August, the first month of operations, the following selected data were taken from the financial statements of Tucker Jacobs, an attorney: In preparing the financial statements, adjustments for the following data were overlooked: Unbilled fees earned at August 31, 31,900. Depreciation of equipment for August, 7,500. Accrued wages at August 31, 5,200. Supplies used during August, 3,000. Instructions 1. Journalize the entries to record the omitted adjustments. 2. Determine the correct amount of net income for August and the total assets, liabilities, and owners equity at August 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. The first adjustment is presented as an example.
The balances of the ledger accounts of Beldren Home Center as of December 31, the end of its fiscal year, are as follows: Data for the adjustments are as follows: ab. Merchandise Inventory at December 31, 102,765. c. Wages accrued at December 31, 1,834. d. Supplies inventory (on hand) at December 31, 645. e. Depreciation of store equipment, 5,782. f. Depreciation of office equipment, 1,791. g. Insurance expired during the year, 845. h. Rent earned, 2,500. Required 1. Complete the work sheet after entering the account names and balances onto the work sheet. Ignore this step if using CLGL. 2. Journalize the adjusting entries. If using manual working papers, record adjusting entries on journal page 16.