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Adjusting entries and errors 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: Net income for August $112,500 Total assets at August 31 650,000 Total liabilities at August 31 225,000 Total owner's equity at August 31 425,000 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 owner's 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.

BuyFind

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615
BuyFind

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615

Solutions

Chapter
Section
Chapter 3, Problem 3.6BPR
Textbook Problem

Adjusting entries and errors

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:

Net income for August $112,500
Total assets at August 31 650,000
Total liabilities at August 31 225,000
Total owner's equity at August 31 425,000

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 owner's 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.

Chapter 3, Problem 3.6BPR, Adjusting entries and errors At the end of August, the first month of operations, the following

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Chapter 3 Solutions

Accounting (Text Only)
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Ch. 3 - Accounts requiring adjustment Indicate with a Yes...Ch. 3 - Accounts requiring adjustment Indicate with a Yes...Ch. 3 - Type of adjustment Classify the following items as...Ch. 3 - Type of adjustment Classify the following items as...Ch. 3 - Adjustment for prepaid expense The supplies...Ch. 3 - Adjustment for prepaid expense The prepaid...Ch. 3 - Adjustment for unearned revenue The balance in the...Ch. 3 - Adjustment for unearned revenue On June 1, 2016,...Ch. 3 - Adjustment for accrued revenues At the end of the...Ch. 3 - Adjustment for unearned revenue The balance in the...Ch. 3 - Adjustment for prepaid expense The prepaid...Ch. 3 - Adjustment for prepaid expense The supplies...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Effect of omitting adjustments For the year ending...Ch. 3 - Effect of omitting adjustments For the year ending...Ch. 3 - Effect of errors on adjusted trial balance For...Ch. 3 - Effect of errors on adjusted trial balance For...Ch. 3 - Vertical analysis Two income statements for...Ch. 3 - Vertical analysis Two income statements for Cornea...Ch. 3 - Classifying types of adjustments Classify the...Ch. 3 - Classifying adjusting entries The following...Ch. 3 - Adjusting entry for supplies The balance in the...Ch. 3 - Determining supplies purchased The supplies and...Ch. 3 - Effect of omitting adjusting entry At March 31,...Ch. 3 - Adjusting entries for prepaid insurance The...Ch. 3 - Adjusting entries for prepaid insurance The...Ch. 3 - Adjusting entries for unearned fees The balance in...Ch. 3 - Effect of omitting adjusting entry At the end of...Ch. 3 - Adjusting entry for accrued fees At the end of the...Ch. 3 - Adjusting entries for unearned and accrued fees...Ch. 3 - Effect of omitting adjusting entry The adjusting...Ch. 3 - Adjusting entries for accrued salaries Ocular...Ch. 3 - Determining wages paid The wages payable and wages...Ch. 3 - Effect of omitting adjusting entry Accrued...Ch. 3 - Effect of omitting adjusting entry Assume that the...Ch. 3 - Adjusting entries for prepaid and accrued taxes...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Determining fixed assets book value The balance in...Ch. 3 - Book value of fixed assets In a recent balance...Ch. 3 - Effects of errors on financial statements For a...Ch. 3 - Effects of errors on financial statements For a...Ch. 3 - Effects of errors on financial statements The...Ch. 3 - Effects of errors on financial statements If the...Ch. 3 - Adjusting entries for depreciation; effect of...Ch. 3 - Adjusting entries from trial balances The...Ch. 3 - Adjusting entries from trial balances The...Ch. 3 - Vertical analysis of income statement The...Ch. 3 - Vertical analysis of income statement The...Ch. 3 - Adjusting entries On March 31, 2016, the following...Ch. 3 - Adjusting entries Selected account balances before...Ch. 3 - Adjusting entries Reliable Repairs Service, an...Ch. 3 - Adjusting entries Good Note Company specializes in...Ch. 3 - Adjusting entries and adjusted trial balances...Ch. 3 - Adjusting entries and errors At the end of April,...Ch. 3 - Adjusting entries On May 31, 2016, the following...Ch. 3 - Adjusting entries Selected account balances before...Ch. 3 - Adjusting entries Crazy Mountain Outfitters Co.,...Ch. 3 - Adjusting entries The Signage Company specializes...Ch. 3 - Adjusting entries and adjusted trial balances...Ch. 3 - Adjusting entries and errors At the end of August,...Ch. 3 - The unadjusted trial balance that you prepared for...Ch. 3 - Ethics and professional conduct in business Daryl...Ch. 3 - Accrued revenue The following is an excerpt from a...Ch. 3 - Adjustments and financial statements Several years...

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