Answer:
Solstice Medical Co.
For the year ended August 31:
Effects of Omissions on (a) revenues (b) expenses (c) net income
(1) depreciation of $8,400 ($8,400)
(2) fees earned not billed $64,400 64,400
(3) accrued wages of $10,600 (10,600)
Net effect +$64,400 +$19,000 +$45,400
Explanation:
a) Data and Analysis of Omitted Adjusting Entries:
(1) depreciation of $8,400: increase expenses and reduce net income
(2) fees earned that were not billed of $64,400: increase revenue and net income
(3) accrued wages of $10,600: increase expenses and reduce net income
