Current Attempt in Progress Bonita Company understated its inventory by $19500 at December 31, 2020. It did not correct the error in 2020 or 2021. As a result, Bonita's owner's equity was: understated at December 31, 2020, and overstated at December 31, 2021. understated at December 31, 2020, and understated at December 31, 2021. understated at December 31,2020, and properly stated at December 31, 2021. overstated at December 31, 2020, and overstated at December 31, 2021.
Q: A Company began a construction project on a building for P3,000,000. The project was completed…
A: The term "Construction in Progress" (CIP) refers to an accounting account used to track the costs…
Q: Taylor Tackers uses process costing. It produces a tacker used by movers to seal boxes. Taylor has…
A: S.no.ParticularAmount Dr.Amount Cr.a. Issuance of direct Material Work in Process A/c…
Q: Consider the following data for three divisions of a company, X, Y, and Z: Divisional: X Y Z…
A: The objective of the question is to calculate the asset turnover (AT) for Division Y. Asset turnover…
Q: The following are the data extracted from the books of a retailer and registered with the National…
A: Value Added Tax (VAT) is a consumption-based levy imposed at distinct points in the production and…
Q: Please do not give solution in image format thanku
A: The objective of this question is to prepare a cash budget for ABC Company for the month of August.…
Q: Budgets In response to a question about financing the acquisition, Rexford replied as follows: “The…
A: "Since you have asked a question with sub-parts more than three, as per guidelines, the first three…
Q: Exercise 13-3 (Algo) Computing and analyzing trend percents LO P1 Sales Cost of goods sold Accounts…
A: Financial Trend Analysis involves assessing historical financial data over time to identify…
Q: Please do not give solution in image format thanku
A: The objective of the question is to calculate the unit contribution margin and contribution margin…
Q: Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The…
A: Present value factor at 15% cost of capital:YearTable ITable…
Q: s) Unused Capacity Ratliff Appliances Company makes a household appliance with model number RM16.…
A: The amount of money a company spends on coffers ( similar as outfit, space, or labor) that it is…
Q: Controller Incorporated produces two basic types of video games, Clash and Slash. Pertinent data…
A: The objective of the question is to calculate the contribution margin per unit for the video game…
Q: Terrell, an unmarried individual, has the following income items: Schedule C net profit Salary $…
A: Tax refers to the charge that is imposed by the government on the income of an individual or…
Q: Assume a Potbelly's restaurant has the following information available regarding costs at represent-…
A: The high-low method serves as a managerial accounting tool to dissect mixed costs into fixed and…
Q: Explain in general Audit Responsibilities and Objectives
A: An audit is a systematic and impartial study of an organization's books, accounts, papers, and…
Q: At end of the year, you've closed out the accounts of the ABC Company and are ready to open the…
A: A. Rent Expense has an ending credit balance of $1,500:Rent Expense is an operating expense, and…
Q: Kevin owns a country property that he purchased in 1967 for $30,000. The property was worth $25,000…
A: It is the increase or decrease in the value of an asset at a given date or time in comparison to its…
Q: What is the present value of benefit obligation as of Dec 31, 20x8?
A: The present value of benefit obligation (PBO) is a financial measure used in pension accounting to…
Q: Assume that Division A has a product that can be sold either to Division B of the same company or to…
A: Internal transfer pricing refers to the pricing of goods, services, or intangible assets transferred…
Q: teel Corporation buys equipment in January of the current year with a seven-year class life for…
A: The deduction in the year of purchase for E&P purposes due to the acquisition and expensing of…
Q: Debit Accounts receivable $730000 Allowance for uncollectible accounts 7500 Net credit sales Credit…
A: ALLOWANCE FOR DOUBTFUL DEBT ACCOUNT Allowance for Doubtful Debt Account is Considered as Contra…
Q: Morgan (age 45) is single and provides more than 50% of the support of Tammy (a family friend), Jen…
A:
Q: How much is to be allocated for Cooperative Education and Training Fund?
A: The Cooperative Education and Training Fund is a dedicated resource aimed at fostering experiential…
Q: From the following hypothetical data for Riffa Co. in 2018 and 2019 to project revenues, cost of…
A: The inventory turnover ratio indicate the efficiency of management in selling the inventory. The…
Q: Blue Spruce Inc. manufactures basketballs for professional basketball associations. For the first…
A: Lets understand the basics.When special order situation arise.,management needs to make decision…
Q: Which of the following is an example of a direct cost incurred in manufacturing automobiles?…
A: The company incurs multiple costs while manufacturing the product. The cost can be classified as…
Q: American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation.…
A: Journal entries for the purchase of the machine on January 1 2021Date Account Title and Explaination…
Q: During March, Ayayai, Inc. purchases and uses 11,100 pounds of materials costing $46,065 to make…
A: Variance is the result of the difference between the budgeted value and actual results. It is used…
Q: High Country, Incorporated, produces and sells many recreational products. The company has just…
A: Income statement is a financial statement that shows profitability, total revenue and total…
Q: Consider the following list of accounts: Cash Service Revenue Salaries Expense Accounts Payable…
A: TRAIL BALANCE Trail Balance is the Summary Statement of Credit & Debit Balances of All Ledgers.…
Q: Case Study: Cost Accounting for Operational Efficiency and Decision-Making introduction: Cost…
A: Cost Accounting -One type of management accounting system called cost accounting is used to assess…
Q: CYPRUS COMPANY began operation on January 1. Authorized were 20,000 shares of P10 par value ordinary…
A: "Since you have asked a question with sub-parts more than three, as per guidelines, the first three…
Q: Review this sentence: "We recognize that we operate a company in a diverse community, and our…
A: A person's age, sex, race, ethnicity, and/or disabilities will not hinder him or her from being…
Q: The following selected post-retirement benefit accounts were lifted from the 2021 unadjusted trial…
A: "Since you have asked a question with sub-parts more than three, as per guidelines, the first three…
Q: (a) The IASB's Framework for the Preparation and Presentation of Financial Statements requires…
A: Part (a):Matching/Accrual concept-The concept of matching or accrual accounting is an important…
Q: True or False - You prepare tax returns as a side business. During the last year you have record…
A: Taxation -A government's or the taxing authority's method of imposing or collecting a tax on its…
Q: Leah Wells, a yoga instructor, started a company that sells athletic yoga clothing. You are Leah’s…
A: The Mark up means margin or profit required to be earned. The details are given for the same.
Q: Name of Budgeted Cost Plant insurance Testing raw materials Manufacturing equipment setup Quality…
A: First of all, the costs are assigned to the activity pool, then they are determined whether it is…
Q: Using Excel to Perform Horizontal and Vertical Analysis PROBLEM Comparative data from the statement…
A: The objective of the question is to perform a horizontal and vertical analysis of the financial data…
Q: Indigo Windows manufactures and sells custom storm windows for three-season porches. Indigo also…
A: An accounting theory known as revenue recognition describes the precise circumstances under which…
Q: Teh Teratai Sdn. Bhd. involved in making and distributing its herbal tea product, Hebat inBandar…
A: Req (a):Let's break-down the given data for better understanding of the scenario-Target profit…
Q: From the following hypothetical data for Riffa Co. in 2018 and 2019 to project revenues, cost of…
A: Since you have posted multiple questions with multiple sub parts, we will provide the solution only…
Q: The amount to be reported $ 302837.5
A: Amortization is used to reduce the value of an intangible asset over its useful life. Intangible…
Q: Dolphin Company has two service departments, S1 and S2 and three production departments, P1, P2 and…
A: The direct method of cost allocation is a technique used to allocate costs directly to respective…
Q: 1. 2. 3. Assets $-115,000 $ 120,000 $ 218,000 Answer is complete but not entirely correct. Equity $…
A: The balance sheet displays the company’s total assets and how the assets are financed, either…
Q: Required: Using the information provided, complete the following liabilities section of Brook…
A: 1. Current Liability:The portion of the note that is due within the next 12 months will be…
Q: Problem 9-29 (LO. 5) During 2021, José, a self-employed technology consultant, made gifts in the…
A: The Internal Revenue Service (IRS) levies a federal tax known as a gift tax on individual taxpayers…
Q: Which of the following events will result in the automatic termination of S corporation status?…
A: The shares of a deceased shareholder pass to their estate: This event does not automatically…
Q: Variable Costing Income Statement On April 30, the end of the first month of operations, Joplin…
A: Lets understand the basics.Product cost can be calculated by using,(1) Variable cost (2) Absoprtion…
Q: b) ABC Company obtained a grant of GHe 10 million from a government agency for an investment project…
A: A government grant is a benefit that is provided by the government to the company, it may be in…
Q: Miles Audio produces and sells car audio systems. They specialize in receivers and currently offer…
A: Maniac, If special order accepted:
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Effects of an Error in Ending Inventory Waymire Company prepared the partial income statements presented below for 2019 and 2018. During 2020, Waymires accountant discovered that ending inventory for 2018 had been understated by $6,500. Required: 1. Prepare corrected income statements for 2019 and 2018. 2. Prepare a schedule showing each financial statement item affected by the error and the amount of the error for that item (ignore the effect of income taxes). Indicate whether each error is an overstatement (+) or an understatement (-).Borys Companys periodic inventory at December 31, 2019, is understated by 10,000, but purchases are correct. Johnson correctly values its 2020 ending inventory. What is the effect of this error on Boryss 2019 and 2020 financial statements?Effects of an Inventory Error The income statements for Graul Corporation for the 3 years ending in 2019 appear below. During 2019, Graul discovered that the 2017 ending inventory had been misstated due to the following two transactions being recorded incorrectly. a. A purchase return of inventory costing $42,000 was recorded twice. b. A credit purchase of inventory' made on December 20 for $28,500 was not recorded. The goods were shipped F.O.B. shipping point and were shipped on December 22, 2017. Required: 1. Was ending inventory for 2017 overstated or understated? By how much? 2. Prepare correct income statements for all 3 years. 3. CONCEPTUAL CONNECTION Did the error in 2017 affect cumulative net income for the 3-year period? Explain your response. 4. CONCEPTUAL CONNECTION Why was the 2019 net income unaffected?
- Inventory Errors McLelland Inc. reported net income of $175,000 for 2019 and $210,000 for 2020. Early in 2020, McLelland discovers that the December 31, 2019 ending inventory was overstated by $20,000. For simplicity, ignore taxes. Required: 1. What is the correct net income for 2019? For 2020? 2. Assuming the error was not corrected, what is the effect on the balance sheet at December 31, 2019? At December 31, 2020?Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the direct method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.Kraft Manufacturing Company manufactures two products: Mult and Tran. At December 31, 2019, Kraft used the FIFO inventory method. Effective January 1, 2020, Kraft changed to the LIFO inventory method. The cumulative effect of this change is not determinable, and, as a result, the ending inventory of 2019, for which the FIFO method was used, is also the beginning inventory for 2020 for the LIFO method. Any layers added during 2020 should be costed by reference to the first acquisitions of 2020, and any layers liquidated during 2020 should be considered a permanent liquidation. The following information was available from Krafts inventory records for the two most recent years: Required: Compute the effect on income before income taxes for the year ended December 31, 2020, resulting from the change from the FIFO to the LIFO inventory method.
- Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the allowance method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.At the end of 2019, Manny Company recorded its ending inventory at 350,000 based on a physical count. During 2020, the company discovered that the correct inventory value at the end of 2019 should have been 400,000 because it made a counting error. Upon discovery of this error in 2020, what correcting journal entry will Manny make? Ignore income taxes.Schmidt Company began operations on January 1, 2018, and used the LIFO inventory method for both financial reporting and income taxes. However, at the beginning of 2020, Schmidt decided to switch to the average cost inventory method for financial and income tax reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the LIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Schmidt is subject to a 21% income tax rate in all years; it pays all income taxes payable in the next quarter. Assume that any deferred tax liability was paid in the subsequent year. Schmidt had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Schmidt had cash of 15,600, inventory of 34,000, other assets of 76,000, income taxes payable of 4,200, and accounts payable of 3,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in method at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.
- Koopman Company began operations on January 1, 2018, and uses they FIFO inventory method for financial reporting and the average cost inventory method for income taxes. At the beginning of 2020, Koopman decided to switch to the average cost inventory method for financial reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the FIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Koopman is subject to a 21% income tax rate in all years; it pays the income taxes payable of a current year in the first quarter of the next year. Koopman had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Koopman had cash of 10,000, inventory of 24,000, other assets of 70,800, accounts payable of 4,500, and income taxes payable of 6,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in methods at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.An understatement of ending inventory in the year 20-1 will cause the owners equity account at the end of the year 20-2, assuming no other errors, to be (a) understated. (b) correctly stated. (c) overstated. (d) none of the above.Company is considering purchasing EKC Company. EKCs balance sheet at December 31, 2019, is as follows: At December 31, 2019, Elm discovered the following about EKC: a. No allowance for uncollectible accounts has been established. An allowance of 5,000 is considered appropriate. b. The LIFO inventory method has been used. The FIFO inventory method would be used if EKC were purchased by Elm. The FIFO inventors-valuation of the December 31, 2019, ending inventors-would be 180,000. c. The fair value of the property, plant, and equipment (net) is 730,000. d. The company has an unrecorded patent that is worth 120,000. e. The book values of the current liabilities and bonds payable are the same as their market values. Required: 1. Compute the value of the goodwill if Elm pays 1,350,000 for EKC. 2. Next Level Why would the book value of a companys identifiable net assets differ from its market value?