On December 31,2010,Madison Company Prepared an Income Statement and a Balance

question 61

Short Answer

On December 31,2010,Madison Company prepared an income statement and a balance sheet.In making the adjusting entries at year-end,Madison failed to record the adjusting entry for wages earned by employees,but not yet paid,amounting to $5,000 for the last four days of the year.The income statement reported net income of $52,000.The balance sheet reported total assets of $254,000,total liabilities of $170,000 and stockholders' equity of $84,000.
Complete the following tabulation to show the correct amounts for the financial statements (ignore income taxes). $$\begin{array} { | l | l | l | l | l | } \hline \text { Item } & \text { Net Income } & \text { Assets } & \text { Liabilities } & \begin{array} { l } \text { Stockholders' } \\\text { Equity }\end{array} \\\hline \text { Balances reported } & \$ 52,000 & \$ 254,000 & \$ 170,000 & \$ 84,000 \\\hline \text { Correction for wages } & & & & \\\hline \text { Corrected balances } & & & & \\\hline\end{array}$$

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