Suppose that Laramie Company’s adjusted trial balance ignored the following information. For each item of information, indicate what effects, if any, these omissions would have on the stated components of Laramie Company’s 2018 Income Statement and 12/31/18 Balance Sheet. Assume no income taxes.
1) Use the following code for your answers and be sure to include the dollar amounts of the effects next to the letter O or U: N = No Effect O = Overstated U = Understated
2) Additional Information 12/31/18 Assets 12/31/18 Liabilities 12/31/18 Owners’ Equity 2018 Net Income $2,000 interest on a loan was not yet paid or recorded
3) Additional Information 12/31/18 Assets 12/31/18 Liabilities 12/31/18 Owners’ Equity 2018 Net Income The estimated uncollectible accounts receivable is now zero and should be $25,000.
4) Additional Information 12/31/18 Assets 12/31/18 Liabilities 12/31/18 Owners’ Equity 2018 Net Income $10,000 of the paid and recorded rent expense pertains to the year 2019.
5) Additional Information 12/31/18 Assets 12/31/18 Liabilities 12/31/18 Owners’ Equity 2018 Net Income $20,000 in depreciation on some equipment was still unrecorded.
6) Additional Information 12/31/18 Assets 12/31/18 Liabilities 12/31/18 Owners’ Equity 2018 Net Income $4,000 in cash dividends declared and paid in December 2018 were unrecorded.
