Answer to Question #47159 in Finance for Felisia Fitri Anita

Question #47159
For the year ending November 30, 2010, Towson Medical Services Co. mistakenly omitted adjusting entries for (1) $1,430 of supplies that were used, (2) unearned revenue of $11,150 that was earned, and (3) insurance of $6,000 that expired. Indicate the combined effect of the errors on (a) revenues, (b) expenses, and (c) net income for the year ended November 30, 2010.
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Expert's answer
2014-10-13T12:47:40-0400
The combined effect of the errors will be the next:
(a) revenues will increase by $11,150,
(b) expenses will increase by 1,430+6,000 = $7,430,
(c) net income for the year ended November 30, 2010 will increase by 11,150 - 7,430 = $3,720

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