I-01.07 Problem

I-01.07 Problem - Notes payable 80,100 $ Retained earnings...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
I-01.07 Efendi Company hired an accounting intern, Pat Morgan, to prepare its income statement, statement of retained earnings, and balance sheet. Pat indicated a reluctance to undertake this task due to a lack of adequate training. But, Pat agreed provided someone would examine the work in detail and provide useful suggestions for improvement. Pat's work follows: PAT MORGAN'S Income Statement December 31, 20X5 Net Income Services to customers 125,000 $ Expenses Dividends 13,500 $ Rent 11,000 24,500 Revenues 100,500 $ PAT MORGAN'S Statement of Retained Earnings For the Year Ending December 31, 20X1 Beginning retained earnings 45,000 $ Plus: Net income 100,500 145,500 $ Less: Capital stock 200,000 Ending retained earnings (54,500) $ PAT MORGAN'S Equation Sheet December 31, 20X1 Assets Cash 92,700 $ Accounts receivable 37,400 Equipment 239,000 Total assets 369,100 $ Liabilities Accounts payable 7,500 $ Wages expense 64,000 Total expenses 71,500 $ Stockholders' equity
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Notes payable 80,100 $ Retained earnings (54,500) Total stockholders' equity 25,600 Total Liabilities and equity 97,100 $ 1 of 2 I-01.07 (a) Find specific errors in Pat's work. Prepare written review notes for Pat sufficient to allow Pat to understand the errors and make necessary corrections. To get you started, you may assume Pat did manage to get the listing of total assets correct. (b) Provide your notes to a fellow classmate (just call your classmate Pat for purposes of this exercise), and have them prepare corrected reports, based solely on your notes -- right or wrong! Remember that achieving professional success not only depends on technical proficiency but also your ability to communicate and mentor others. (c) Prepare corrected financial statements and compare them to the set provided by your classmate pursuant to requirement (b). 2 of 2...
View Full Document

This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

Page1 / 2

I-01.07 Problem - Notes payable 80,100 $ Retained earnings...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online