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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	$156,900
Total assets at August 31	832,000
Total liabilities at August 31	275,000
Total owner’s equity at August 31	557,000

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

Required:

Unbilled fees earned at August 31, $8,680.

Depreciation of equipment for August, $3,900.

Accrued wages at August 31, $2,780.

Supplies used during August, $2,430.

1. Journalize the entries to record the omitted adjustments.

Aug. 31
31
31
31

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 completing the columnar table below. Use the minus sign to indicate decreases. If an effect is zero, enter "0". Adjustment (a) is presented as an example.

Tucker Jacobs For the Month ofAugust 31

Net Income

Total Assets

=

Total Liabilities

+

Total Owner’s Equity

Reported amounts

$156,900

$832,000

$275,000

$557,000

Corrections:

Unbilled fees earned

+8,680

+8,680

0

+8,680

Equipment depreciation

Accrued wages

Supplies used

Corrected amounts

$

$

$

Check My Work2 more Check My Work uses remaining.

Answer 1