During the year ended December 31, 2021, Angel Company revealed the following events: a) A counting error relating to inventory on December 31, 2020 was discovered. This required an increase in the carrying amount of inventory on that date of P500,000. b)It was also decided to write off P50,000 from inventory which was over two years old as it was obsolete. c) The provision for uncollectible accounts on December 31, 2020 was P200,000. During 2021, an amount of P300,000 was written off on the December 31, 2020 accounts receivable. What pretax adjustment is required to restate retained earnings on January 1, 2021? Your answer
During the year ended December 31, 2021, Angel Company revealed the following events: a) A counting error relating to inventory on December 31, 2020 was discovered. This required an increase in the carrying amount of inventory on that date of P500,000. b)It was also decided to write off P50,000 from inventory which was over two years old as it was obsolete. c) The provision for uncollectible accounts on December 31, 2020 was P200,000. During 2021, an amount of P300,000 was written off on the December 31, 2020 accounts receivable. What pretax adjustment is required to restate retained earnings on January 1, 2021? Your answer
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
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 13P: Errors As controller of Lerner Company, which uses a periodic inventory system, you discover the...
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