The income statement of Annette Co. for the month of July shows net income of $3,200 based on Service Revenue $7,700, Salaries and Wages Expense $2,600, Supplies Expense $1,400, and Utilities Expense $500. In reviewing the statement, you discover the following:1. Insurance expired during July of $500 was omitted.2. Supplies expense includes $300 of supplies that are still on hand at July 31.3. Depreciation on equipment of $250 was omitted.4. Accrued but unpaid salaries and wages at July 31 of $400 were not included.5. Services provided but unrecorded totaled $700.Required:a. What effect do the corrections have on the amount reported as total assets on the balance sheet?b. What effect do the corrections have on the amount reported as total liabilities on the balance sheet?

An income statement is a financial document that presents the costs and revenues of a firm. It also displays if a company is profitable or losing money over a specified time period.

The financial statements, together with the balance sheet and income statement, aids in the understanding of your company’s liquidity.

The table for solution 1 has been attached below.

2. Effect of correction on the total assets of the company = -$500+$300-$250+$700= $250

Therefore, the correct will increase total assets by $250

3. Correction will raise the total liabilities by the amount of $400.

It will impact the salaries and the wages payable.

To know more about the effect of the correction, refer to the link below:

https://brainly.com/question/14746205