SHEILA SHAW CONSULTING
Income Statement
For the Month Ended August 31, 2011

Fees earned $ 24,325
Expenses:
Salary expense $1,550 Depreciation expense……………………………………… 675 Rent expense 1,200 Supplies expense 1,250 Insurance expense 1,000 Miscellaneous expense 715 Interest expense 65 Bad Debt expense 150 Repairs and Maintenance 200 Utilities expense 150 Payroll Tax expense 125 Office expense 525 Total expenses 7,605 Net income $ 16,720
The depreciation expense was not included in the income statement. There is a depreciation amount of $675 on the balance sheet and I added it to the expenses of the income statement. I have highlighted what I have corrected in yellow and the total expenses along with the net income have changed.

SHEILA SHAW CONSULTING
Statement of Owner’s Equity
For the Month Ended August 31, 2011

Sheila Shaw, capital, August 1, 2007 $ 0 Additional investments during the month 36,000 Total $ 36,000 Net income for the month $ 16,720 Less withdrawals 5,000 Increase in owner’s equity 11,720 Sheila Shaw, capital, August 31, 2007 $ 47,720

I have made a correction to the net income for the month as for the depreciation expense was not listed on the income statement. The amount of the net income was $16,720 and it is highlighted in green. The amount of the owner’s equity and Sheila Shaw, capital, August 21, 2007 was also corrected.

SHEILA SHAW CONSULTING
Balance Sheet
August 31, 2011

Assets Liabilities Current assets: Current liabilities: Cash $ 21,300 Accounts payable $ 1,250 Accounts receivable 3,800 Salaries payable 150 Supplies 875 Unearned fees 1,150 Prepaid rent 2,050 Total liabilities $ 2,550 Prepaid insurance 1,670 Total current assets $