37ABC Company reported net income and retained earnings for a two – year period as follows: Net Income Retained Earnings, Ending2020 6,000,000 6,000,0002021 8,000,000 14,000,000 In checking the statement for the year ended December 31, 2020, the following errors are discovered: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.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.Depreciation expense in 2020 was understated by P 12,000.Depreciation expense in 2021 was overstated by P 14,000.Bad debts expense of P 11,000 was not recorded in 2020. How much is the adjusted December 31, 2021 Retained Earnings Balance?

Name: 37ABC Company reported net income and retained earnings for a two – ye
Uploaded: 2024-03-04T10:43:15.000Z
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Description: 37ABC Company reported net income and retained earnings for a two – year period as follows: Net Income Retained Earnings, Ending2020 6,000,000 6,000,0002021 8,000,000 14,000,00

First of all, we have to calculate the adjusted Retained Earning balance on December 31, 2020.

Answered: ABC Company reported net income and…

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

Chapter22: Accounting For Changes And Errors.

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ABC Company reported net income and retained earnings for a two – year period as follows:

Net Income Retained Earnings, Ending

2020 6,000,000 6,000,000

2021 8,000,000 14,000,000

In checking the statement for the year ended December 31, 2020, the following errors are discovered:

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.
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.
Depreciation expense in 2020 was understated by P 12,000.
Depreciation expense in 2021 was overstated by P 14,000.
Bad debts expense of P 11,000 was not recorded in 2020.

How much is the adjusted December 31, 2021 Retained Earnings Balance?

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