Reference no: EM13258026

At the end of October, the first month of operations, thefollowing selected data were taken from the financial statements ofMichael Han, Attorney-at-law, P.C.

Net income forOctober                                 $240,000

Total assets at October31                               750,000

Total liabilities at October31                          250,000

Total stockholders' equity at October31       500,000

In preparing the financial statements, adjustments for thefollowing data were overlooked:

a. Unbilled fees earned atOctober 31, $12,000.

b. Depreciation of equipment forOctober, $4,000.

c. Accrued wages at October31, $3,100.

d. Supplies used during October,$1,250.

Instructions:

Determine the correct amount of net income for October and thetotal assets, liabilities, and stockholders' equity atOctober 31. In addition to indicating the corrected amounts,indicate the effect of each omitted adjustment by setting up andcompleting a columnar table similar to thefollowing. Adjustment (a) is presented as an example.

                                                 Net               Total               Total            Total Stockholders'

                                               Income                       Assets           Liabilities                 Equity

Reportedamounts                  $240,000        $750,000        $250,000               $500,000

Corrections:

Adjustment(a)                       +12,800          +12,800                      0                +12,800

Adjustment(b)                            ?                   ?                        ?                           ?

Adjustment(c)                             ?                    ?                        ?                           ?

Adjustment(d)                             ?                    ?                        ?                           ?

CorrectedAmounts                      ?                    ?                        ?                           ?