Question

Exercise 4-16 Your answer is partially correct. Try again. On December 31, 2017, Cullumber Company prepared an income statement and balance sheet, but failed to take into account three adjusting entries. The balance sheet showed total assets and equity $92,800. The incorrect income statement showed net income of $81,200. $174,000, total liabilities $81,200, and stockholders The data for the three adjusting entries were: 1. Salaries and wages amounting to $11,600 for the last 2 days in December were not paid and not recorded. The next payroll will be in January. Rent payments of $9,280 was received for 2 months in advance on December 1. The entire amount was credited to Unearned Rent Revenue when paid. 3. Depreciation expense for 2017 1s $10,440 Complete the following table to correct the financial statement amounts shown (indicate deductions with Item Incorrect balances Effects of parentheses) Total Liabilities $81,200 Net Income Total Assets $174,000 Stockholders' E quity $92,800 81,200 Salaries and Wages 11,600 Rent Revenue Depreciation 10,440) Correct balances 163,

Answer 1

Item	Net Income	Total Assets	Total Liabilities	Stockholder’s Equity
Incorrect balances	$ 81,200	$ 174,000	$ 81,200	$ 92,800
Effects of:
Salaries and wages	($ 11,600)	0	$ 11,600	($ 11,600)
Rent revenue	$ 4,640	0	($ 4,640)	$ 4,640
Depreciation	($ 10,440)	($ 10,440)	0	($ 10,440)
Correct balances	$ 62,800	$ 163,560	$ 88,160	$ 75,400