# The data for the three adjusting entries were 1

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Chapter 9 / Exercise 9.5
Financial Reporting, Financial Statement Analysis and Valuation
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stockholders’ equity, \$70,000.The data for the three adjusting entries were:(1)Depreciation of \$7,000 was not recorded on equipment.(2)Wages amounting to \$10,000 for the last two days in December were not paid and not recorded. The next payroll will be in January.(3)Rent of \$9,000 was paid for two months in advance on December 1. The entire amount was debited to Prepaid Rent when paid.Instructions:Complete the following tabulation to correct the financial statement amounts shown (indicate deductions with parentheses):ItemNet IncomeTotal AssetsTotal LiabilitiesStockholders’ EquityIncorrect balances\$ 40,000\$130,000\$ 60,000\$ 70,000Effects of:Depreciation WagesRentCorrect BalancesSolution 256(10 min.)ItemNet IncomeTotal AssetsTotal LiabilitiesStockholders’ EquityIncorrect balances\$40,000\$130,000\$60,000\$70,000Effects of:Depreciation(7,000)(7,000)(7,000)Wages(10,000)10,000(10,000)Rent (4,500)(4,500)(4,500)Correct Balances\$18,500\$118,500\$70,000\$48,500Ans: N/A, SO 4 & 5, BT: AP, Difficulty: Hard, TOT: 10 min., AACSB: Analytic, AICPA BB: None, AICPA FN: Measurement, AICPA PC: Problem SolvingFOR INSTRUCTOR USE ONLY4-63
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Chapter 9 / Exercise 9.5
Financial Reporting, Financial Statement Analysis and Valuation
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Expert Verified