Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 71

Effects of adjustments A bookkeeper prepared the year-end financial statements of Giftwrap, Inc. The income statement showed net income of $47,400, and the balance sheet showed ending retained earnings of $182,000. The firm’s accountant reviewed the bookkeeper’s work and determined that adjustments should be made that would increase revenues by $10,000 and increase expenses by $16,800.

Required:

Calculate the amounts of net income and retained earnings after the preceding adjustments are recorded.

Step 1 of 2

Effects of adjustments

By extracting the information: