At the end of April, he first month of operations,the following selected data we

Question

At the end of April, he first month of operations,the following selected data were taken from the financial statements of Shelby Crawtord,an attomey Net income for April Total assets at April 30 Total liabilities at April 30 Total owner's equity at April 30 $120,000 750,000 300,000 450,000 In preparing the financial statements, adjustments for the following data were overlooked: Supplies used during April, $2,750o. Unbilled fees earned at April 30, $23,700 Depreciation of equipment for April, $1,800 Accrued wages at April 30, $1,400. Required 1. Journalize the entries on April 30 to record the omited adjustments. Refer to the Chart of Accounts for exact 2. Determine the correct amount of net income tor Apni and the total assets, Nabilities, and owners equity at Apri 30 wording of account aties

Explanation / Answer

Answer to part: 1.

Journal Entries:

      Supplies consumed                                                              Dr     $ 2,750

             To Assets                                                                                                        $ 2,750

(Being stock consumed as supplies)

      Profit and Loss A/c                                                               Dr    $ 2,750

             To supplies consumed                                                                                  $ 2,750

(Being supplies consumed)

       Fees Earned                                                                           Dr    $ 23,700

              To Fees                                                                                                           $ 23,700

   (Being unbilled fees earned)

      Fees                                                                                         Dr     $ 23,700

              To Profit and Loss A/c                                                                                  $ 23,700

   (Being fees earned charged to profit and loss a/c)

      Depreciation A/c                                                                      Dr     $ 1,800

               To Assets                                                                                                      $ 1,800

   (Being depreciation created)

      Profit and Loss A/c                                                                  Dr     $ 1,800      

               To Depreciation A/c                                                                                    $ 1,800

(Being Depreciation charged to Profit and loss a/c)

      Wages                                                                                        Dr    $ 1,400

                 To Accrued Wages                                                                                    $ 1,400

( Being wages accrued)   

      Profit and Loss A/c                                                                   Dr     $ 1,400

                To Wages                                                                                                   $ 1,400

    (Being wages charged to profit and loss a/c)

Answer to part: 2.

Net income for April     ($ 120,000 - $ 2,750 + $ 23,700 - $ 1,800 - $ 1,400) =   $ 137,750

Total assets at April 30 ($ 750,000 - $ 2,750 + $ 23,700 - $ 1,800)                =   $ 769,150

Total liabilities at April 30 ($ 300,000 + $ 1,400)                                                =   $ 301,400

Total owners equity at April 30 ($ 769,150 – 301,400)                                     =   $ 467,750

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