Clock Company showed the following errors in their account during December 31, 2021: • Dividends of P 100,000 had been declared but was not recorded on December 10, 2021. • Buildings and equipment maintenance for P 480,000 had been debited to expense at the end of April 2020. It had an estimated life of 8 years. • The company failed to record sales commissions payable amounting to P 10,50C and P 19,000 at the end of 2020 and 2021, respectively. • Supplies on hand amounting to P 6,000 and P 15,000 were not recognized at th end of 2020 and 2021, respectively. Vhat is the net effect of the error in the 2021 net income?

Clock Company showed the following errors in their account during December 31, 2021: • Dividends of P 100,000 had been declared but was not recorded on December 10, 2021. • Buildings and equipment maintenance for P 480,000 had been debited to expense at the end of April 2020. It had an estimated life of 8 years. • The company failed to record sales commissions payable amounting to P 10,50C and P 19,000 at the end of 2020 and 2021, respectively. • Supplies on hand amounting to P 6,000 and P 15,000 were not recognized at th end of 2020 and 2021, respectively. Vhat is the net effect of the error in the 2021 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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10P: At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2...

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Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended December 31, 2019 and 2020, contained the following errors: In addition, on December 31, 2020, fully depreciated machinery was sold for 10,800 cash, but the sale was not recorded until 2021. There were no other errors during 2019 or 2020, and no corrections have been made for any of the errors. Refer to the information for Shannon Corporation above. Ignoring income taxes, what is the total effect of the errors on the amount of working capital (current assets minus current liabilities) at December 31, 2020? a. working capital overstated by 4,200 b. working capital understated by 5,800 c. working capital understated by 6,000 d. working capital understated by 9,800
At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2 years: Reported net income was 27,000 in 2018 and 35,000 in 2019. The allowance for doubtful accounts had a zero balance at the beginning of 2018. No accounts were written off during 2018 or 2019. Ignore income taxes. Required: 1. What is the correct net income for 2018 and 2019? 2. Prepare the adjusting journal entry in 2020 to correct the errors.
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