Accounting Errors And Correct Treatment

This case gives students an opportunity to determine the accounting for impairment of long-lived assets in accordance with ASC 360-10.

The account balances assertion was also misstated on. This is specifically on the PCAOB assertion about right and obligations. The City of Dixon had a bank account in their name called the RSCDA. This was a fraudulent account created by Crundwell to pull off her scheme. However, as this bank account was under the City of Dixon’s name the account should have appeared on the financial statements, with an accurate balance. The city had right to this misused bank account.

Next, you have to contact the regional director, Peter, as quick as possible, although he may be preparing for the family funeral. It is important to let him know the incident that the financial director had a little deviation on the understandings for the extra costs and the date receiving the income. Also, you ought to suggest Peter to make a correction on those data.

$8 mill needed to be deducted from net income on the income statement. They should have followed (Following) with disclosure notes to describe why this error occurred and how it impacted the statement and accounts that it touched. For instance, the notes would describe the presence of the correction on the current period of beginning inventory, and retainED earnings.

Payton Approved, a new dog bakery opened in July 2014. To measure the businesses success the first six months are reviewed. The first topic will discover the steps of the accounting cycle with descriptions of each process. Next, one will learn and analyze a report of the importance of each step for the accounting process to measure success. The last analyzed step will discuss how the omission of one step can impact the success of the company.

The accountant did not prepare an entry to adjust the Supplies account at the end of the accounting period and, as a result:

According to the fact of this case, Parent Co. (Parent) wholly owns Poor Son Co. (Poor Son) as a legal subsidiary, and both of them all nonpublic companies. However, in January 2007 Poor Son filed a voluntary bankruptcy under Chapter 11 of the U.S. bankruptcy code because of its inability of meet obligations as they became due. Then, Parent claimed the loss of control of Poor Son and deconsolidated Poor Son from its financial statement. Through the bidding process in May 2009, Poor Son and OtherCo, the winning sponsor, filed a joint plan of reorganization to the bankruptcy court, but the plan was rescinded by OtherCo later due to significant market value shrink of Poor Son. After that, the

Subtotal Less: 2 178 000 Work in process inventory, 31 December Cost of goods manufactured 48 000 $2 130 000 2 Maximus Manufacturing Ltd Schedule of Cost of Goods Sold for the year ended 31 December Finished goods inventory, 1 January Add: Cost of goods manufactured Cost of goods available for sale Finished goods inventory, 31 December Cost of goods sold $ 42 000 2 130 000 2 172 000 48 000 $2 124 000 4 3 Maximus Manufacturing Ltd Income Statement for the year ended 31 December Sales revenue Less: Cost of goods sold $2 526 000 2 124 000 Gross margin 402 000 Selling and administrative expenses 322 800 Profit before taxes 79 200 Income tax expense 30 000

Tax rates other than the current tax rate may be used to calculate the deferred income tax amount on the balance sheet if

The Substantive Tests of Details in this case found the same issues as the subsequent receipt verification, some of the balances did not meet the mark. It seems the overall audit was conducted adequately with one exception, the incomplete balance information. That is the definition of Qualified Report and the reason I did not choose the other reports, all the facts concerning financial transactions and statements were properly and accurately recorded and statements prepared in conformity with Generally Accepted Accounting Principles (GAAP); or so I thought. My decision to issue the Qualified Report yielded a negative response; I should have opted for the Disclaimer Report. Even though it seemed the rest of the audit went well, I should have looked at the true definition of Quality Report.

I experienced the same issue when I forgot to select the Net Income in the drop down menu option on question number 7. I also used Figure 5.8A-F as my reference, but I still forgot to include some transactions. I guess double checking is the better way to make sure that all transaction was entered.

Due to the information, 20 acres of land equal 80 sheep according to the exchange rate of last year, a one-room cabin equal 3 acres of land and equal 12 sheep finally, a plow equals 2 goat and equal 2/3 sheep according to last year’s exchange rate and 2 carts which were traded with a poor acre of land equals 8 sheep plus 400 sheep. So Deyonne’s total assets are 500(2/3) sheep. Deyonne’s liabilities and assets deduction are 35 sheep plus 3 sheep, which will come to 38 sheep,

The two junior accountants should provide accurate and sufficient accounting information to illustrate a clear financial overview of the company. If before attending the meeting, the two accountants realised that they should include the change in entity as well as other relevant reports yet they failed to do that, they themselves should identify the threats which prevented them from doing their job properly, including time limitation, low efficiency and lack of moral development.

Appropriately tracing costs is extremely important when creating segmented income statements. Traceable costs are those costs that are directly incurred by and traceable to a specific segment of an organization (Brewer, 2015). This figure is then used when computing the segment margin, which indicates the long-run profitability of that business segment (Brewer, 2015). If costs are traced inaccurately, the profitability of a business segment may be over or under valued which may lead managers to make potentially unfortunate business decisions regarding that segment. For example, if the fixed costs of segment A are inaccurately traced to segment B, segment B may look as though it requires more money to break-even. Based on this inaccurate information,

It has been a pleasure to be part of Serious Reader Company (SRC) and I am honored to be the one presenting you the 2015 Income Statement (IS). In compliance with your request, the Managerial accounting interpretation of the results and merely in gross margin income, statement was using Variable Costing. The cost classification is based in “all non-manufacturing categories”, direct, indirect and fixed. It includes the recommended projection on how SRC can adjust its strategies.