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  3. problem 4: impact of omission on income statement

Problem 4: Impact of omission on income statement and balance sheet: Suppose that Lora Company's...

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Accounting

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Problem 4: Impact of omission on income statement and balance sheet: Suppose that Lora 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 Lora Company's 2018 Income Statement and 12/31/18 Balance Sheet. Assume no income taxes. 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: [First one is a sample response solved for you] N = No Effect O = Overstated U = Understated Additional Information 12/31/18 12/31/18 12/31/18 2018 Assets N Liabilities Owners' Equity Net Income U2,000 02,000 02,000 $2,000 interest on a loan was not yet paid or recorded $10,000 of the paid and recorded rent expense pertains to the year 2019 $20,000 in depreciation on some equipment was still unrecorded. $4,000 in cash dividends declared and paid in December 2018 were unrecorded. Employees have worked for the week, but Lora plans to pay them next month. Their total salaries were $10,000 $5,000 of unearned revenue has been earned but remains unrecorded

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