On 31 December 2019, Lance Ltd prepared an income statement and a statement of financial position but failed to take into account three adjusting entries. The incorrect income statement showed a profit of $40,000. The statement of financial position showed total assets, $120,000; total liabilities, $50,000; and equity, $70,000.
The data for the three adjusting entries were:
(1) Depreciation of $7,000 was not recorded on equipment.
(2) Wages amounting to $8,000 for the last two days in December were not paid and not recorded. The next payroll will be in January.
(3) Rent of $12,000 was paid for two months in advance on 31 December. The entire amount was debited to Rent Expense when paid.
Complete the following tabulation to correct the financial statement amounts shown (indicate deductions with parentheses)

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The Answer of On 31 December 2019, Lance Ltd prepared an income statement and a statement of financial position but failed to take into account three adjusting entries. The incorrect income statement showed a profit of $40,000. The statement of financial position showed total assets, $120,000; total liabilities, $50,000; and equity, $70,000.
The data for the three adjusting entries were:
(1) Depreciation of $7,000 was not recorded on equipment.
(2) Wages amounting to $8,000 for the last two days in December were not paid and not recorded. The next payroll will be in January.
(3) Rent of $12,000 was paid for two months in advance on 31 December. The entire amount was debited to Rent Expense when paid.
Complete the following tabulation to correct the financial statement amounts shown (indicate deductions with parentheses)

On 31 December 2019, Lance Ltd Prepared an Income Statement