Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 67

Analyzing the Effects of Adjusting Journal Entries on the Income Statement and Balance Sheet
On December 31,2012, Alan and Company prepared an income statement and balance sheet but failed to take into account four adjusting journal entries. The income statement, prepared on this incorrect basis, reported income before income tax of $30,000. The balance sheet (before the effect of income taxes) reflected total assets, $90,000; total liabilities, $40,000; and stockholders'equity, $50,000. The data for the four adjusting journal entries follow:
a. Depreciation of $8,000 for the year on equipment was not recorded.
b. Wages amounting to $17,000 for the last three days of December 2012 were not paid and not recorded (the next payroll will be on January 10, 2013).
c. Rent revenue of $4,800 was collected on December 1, 2012, for office space for the three-month period December 1, 2012, to February 28, 2013. The $4,800 was credited in full to Unearned Rent Revenue when collected.
d. Income taxes were not recorded. The income tax rate for the company is 30%.
Required:
Complete the following table to show the effects of the four adjusting journal entries (indicate deductions with parentheses):