Question

10.00 points On December 31, Fawal Company prepared an income statement and balance sheet and failed to take into account four adjusting entries. The income statement, prepared on this incorrect bass, vected preta Income of $73.000. The balance sheet before the effect of income taxes) reflected totale $173,000 total liabilities. 80.000and stockholders' equity, 584,000. The data for the four wingers low a. Wagos amounting to $20,000 for the last three days of December were not paid and not recorded the next payroll will be at the beginning of next your) b. Depreciation of $13,000 for the year on equipment that cost $173,000 was not recorded. Rent revenue of $10,800 was collected on December 1 of the current year for omto space for the period December 1 10 February 28 of the next year. The $10,000 was created in tali to neared Rent d. Income taxes were not recorded. The income tax rate for the company is 30 percent Required: Complete the following tabulation to correct the francial statements for the effects of the four errors. (Amounts to be deducted should be indicated with a minus sign) Net Income Total Assets Total Stockholders' Liabilities Equity $ 73,000 $ 173,000 $ 89,000 $ 84.000 D Items Balances reported Additional adjustments Wages Depreciation Rent revenue Adjusted balances Income taxes Correct balances d

Answer 1

The adjustments made to the stock holders equity is because it includes net profit portion,so all the adjustments made to the net income are adjusted accordingly with stock holders equity.

total assets =total liabilities+stock holders equity =$160,000.

particulars	net income	total assets	total liabilities	stock holders equity
balances reported	73000	173000	89000	84000
additional adjustments
wages	-20000		20000	-20000
Depreciaition	-13000	-13000		-13000
rent revenue	3600		-3600	3600
adjsuted balances
income taxes	-13080		13080	-13080
correct balances	30520	160000	118480	41520