This is the question: At the end of the year, the accountant for Guzman Painting Contractors prepares financial statements, but neglects to prepare the adjustments for the Supplies account. The balance in the Supplies account at the end of the year is $3500. An actual count shows that the value of supplies on hand at the end of the year is $700.

the net income for the year as calculated by the accountant is $47000, and the total assets are $145000. However, the figures are incorrect, because Supplies has not been adjusted.

A) by how much is the net income overstated? Why? I got $2800
B) by how much are the assets overstated? Why? I got $2800

C) what are the correct figures for the net income and the total assets?
I got net income $44200 and total assets $142,200.

are my answers correct? Thanks!!

Looks good to me. Your Supplies account is overstated by the difference in what your account balance says you have and your actual account balance so you have to do an adjusting entry to get your account balance to agree with your actual account blance.

The amount of your difference between your account balance and your actual blance is the amount of your over statement of your assets as well as your net income because your expenses will be understated by the same amount. An asjusting entry affects one balance sheet account and one income statement account.