ABC Company reported net income and retained earnings for a two-year period as follows: 2020 2021 Net Income Retained Earnings, Ending 6,000,000 14,000,000 6,000,000 8,000,000 In checking the statement for the year ended December 31, 2020, the following errors are discovered: 1. The company paid one-year insurance premium of P 240,000 effective April 1, 2020. The entire amount was debited to asset account and no adjustment was made at the end of 2020. 2. The company leased a portion of its building for P 480,000. The term of the lease is one year ending April 30, 2021. Collection of rent was credited to unearned rent revenue account. At the end of 2020, no entry was made to take up the earned portion of the amount collected. 3. Depreciation expense in 2020 was understated by P 12,000. 4. Depreciation expense in 2021 was overstated by P 14,000. 5. Bad debts expense of P 11,000 was not recorded in 2020. How much is the adjusted 2020 Net Income?

ABC Company reported net income and retained earnings for a two-year period as follows: 2020 2021 Net Income Retained Earnings, Ending 6,000,000 14,000,000 6,000,000 8,000,000 In checking the statement for the year ended December 31, 2020, the following errors are discovered: 1. The company paid one-year insurance premium of P 240,000 effective April 1, 2020. The entire amount was debited to asset account and no adjustment was made at the end of 2020. 2. The company leased a portion of its building for P 480,000. The term of the lease is one year ending April 30, 2021. Collection of rent was credited to unearned rent revenue account. At the end of 2020, no entry was made to take up the earned portion of the amount collected. 3. Depreciation expense in 2020 was understated by P 12,000. 4. Depreciation expense in 2021 was overstated by P 14,000. 5. Bad debts expense of P 11,000 was not recorded in 2020. How much is the adjusted 2020 Net Income?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 7E: Multiple-Step and Single-Step Income Statements, and Statement of Comprehensive Income On December...

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Balance Sheet Calculations Cornerstone Development Companys balance sheet information at the end of 2019 and 2020 is provided in random order, as follows: Additional information: At the end of 2019, (a) the amount of long-term liabilities is twice the amount of current liabilities and (b) there are 2,900 shares of common stock outstanding. During 2020, the company (a) issued 100 shares of common stock for 25 per share, (b) earned net income of 20,600, and (c) paid dividends of 1 per share on the common stock outstanding at year-end. Required: Next Level Fill in the blanks lettered (a) through (p). All of the necessary information is provided. (Hint: It is not necessary to calculate your answers in alphabetical order.)
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