Question

The completed worksheet for Cantu Corporation as of December 31, 2019, after the company had completed the first month of operation, appears below.

CANTU CORPORATION Worksheet Month Ended December 31, 2019
		Trial Balance						Adjustments						Adjusted Trial Balance						Income Statement						Balance Sheet
Account Name		Debit			Credit			Debit			Credit			Debit			Credit			Debit			Credit			Debit			Credit
Cash		77,400												77,400												77,400
Accounts Receivable		12,200												12,200												12,200
Supplies		10,500									6,200			10,500												4,300
Prepaid Advertising		15,600									2,600			15,600												13,000
Equipment		65,000												65,000												65,000
Accumulated Depreciation—Equipment											1,300						1,300												1,300
Accounts Payable					12,200												12,200												12,200
Selena Cantu, Capital					108,200												108,200												108,200
Selena Cantu, Drawing		7,400												7,400												7,400
Fees Income					86,700												86,700						86,700
Supplies Expense								6,200						6,200						6,200
Advertising Expense								2,600						2,600						2,600
Depreciation Expense-Equipment								1,300						1,300						1,300
Salaries Expense		17,000												17,000						17,000
Utilities Expense		2,000												2,000						2,000
Totals		207,100			207,100			10,100			10,100			208,400			208,400			29,100			86,700			179,300			121,700
Net Income																				57,600									57,600
																				86,700			86,700			179,300			179,300

Required:

Prepare an income statement.

Prepare a statement of owner’s equity. The owner made no additional investments during the month.

Prepare a balance sheet.

Analyze:
If the adjustment to Prepaid Advertising had been $5,200 instead of $2,600, what net income would have resulted?

Answer 1