For the year ending December 31, 2020, Nathan Clinical Supplies Co. mistakenly omitted adjusting entries for (1) ₱8,900 of unearned revenue that was earned, (2) earned revenue that was not billed of ₱10,200, and (3) accrued wages of ₱7,000. Indicate the combined effect of the errors on (a) revenues, (b) expenses, and (c) net income for 2020.
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For the year ending December 31, 2020, Nathan Clinical Supplies Co. mistakenly omitted
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- Dudley Company failed to recognize the following accruals. It also recorded the prepaid expenses and unearned revenues as expenses and revenues, respectively', in the following year when paid or collected. The reported pretax income was 20,000 in 2018, 25,000 in 2019, and 23,000 in 2020. Required: 1. Compute the correct pretax income for 2018, 2019, and 2020. 2. Prepare the journal entries necessary in 2020 if the errors are discovered at the end of that year. Ignore income taxes. 3. Prepare the journal entries necessary in 2021 if the errors are discovered at the end of that year. Ignore income taxes.At the end of 2019, Framber Company received 8,000 as a prepayment for renting a building to a tenant during 2020. The company erroneously recorded the transaction by debiting Cash and crediting Rent Revenue in 2019 instead of 2020. Upon discovery of this error in 2020, what correcting journal entry will Framber make? Ignore income taxes.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
- The balance in the unearned rent account for Jones Co. as of December 31 is $1 ,20(). If Jones Co. failed to record the adjusting entry for $600 of rent earned during December, the effect on the balance sheet and income statement for December would 1w: A. Assets understated by $600; net income overstated by $600. B. Liabilities understated by $600; net income understated by $600. C. Liabilities overstated by $600; net income understated by $600. D. Liabilities overstated by $600; net income overstated by $600.The unadjusted trial balance of Recessive Interiors at January 31, 2019, the end of the year, follows: The data needed to determine year-end adjustments are as follows: a. Supplies on hand at January 31 are 2,850. b. Insurance premiums expired during the year are 3,150. c. Depreciation of equipment during the year is 5,250. d. Depreciation of trucks during the year is 4,000. e. Wages accrued but not paid at January 31 are 900. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in the appropriate Balance column of a four-column account and place a check mark () in the Posting Reference column. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (3) as needed. 3. Journalize and post the adjusting entries, inserting balances in the accounts affected. Record the adjusting entries on Page 26 of the journal. The following additional accounts from Recessive Interiors chart of accounts should be used: Wages Payable, 22; Depreciation ExpenseEquipment, 54; Supplies Expense, 55; Depreciation ExpenseTrucks, 56; Insurance Expense, 57. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of owners equity (no additional investments were made during the year), and a balance sheet. 6. Journalize and post the closing entries. Record the closing entries on Page 27 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 7. Prepare a post-closing trial balance.A review of Anderson Corporations books indicates that the errors and omissions pertaining to the balance sheet accounts shown as follows had not been corrected during the applicable years. The net income per the books is: 2017, 10,000; 2018, 12,000; 2019, 15,000; and 2020, 20,000. No dividends were declared during these years and no adjustments were made to retained earnings. The Retained Earnings balance on December 31, 2020, is 50,000. Omissions Required: Determine the correct net income for the years 2017, 2018, 2019, and 2020, and the adjusted balance sheet accounts as of December 31, 2020. Ignore possible income tax effects.
- Worksheet Victoria Company has the following account balances on December 31, 2019, prior to any adjustments: Additional adjustment information: (a) depreciation on buildings, 1,100; on equipment, 600; (b) bad debts expense, 240; (c) interest accumulated but not paid: on note payable, 50; on mortgage payable, 530 (this interest is due during the next accounting period); (d) insurance expired, 175; (e) salaries accrued but not paid 370; (f) rent was collected in advance and the performance obligation is now satisfied, 800; (g) office supplies cm hand at year-end, 230 (expensed when originally purchased earlier in the year); and (h) the income tax rate is 30% on current income and is payable in the first quarter of 2020. Required: 1. Transfer the account balances to a 10-column worksheet and prepare a trial balance. 2. Prepare the adjusting entries in the general journal and complete the worksheet. 3. Prepare the companys income statement, retained earnings statement, and balance sheet. 4. Prepare closing entries in the general journal.The accountant of Reliable Consulting, Inc. failed to make an adjusting entry to record $6,000 for unearned service revenues that were earned before the end of the fiscal year. Assume the company initially recorded a liability. Which of the following statements is true? A. The total liabilities will be overstated. B. The total liabilities will be understated. C. The total assets will be overstated. D. The total assets will be understated.High company, your client, failed to record accrued salaries expense of 50,000 as of December 31, 2022Based on the foregoing, answer the following questions:1.) Which of the following accounts is(are) understated by 50,000 at the end of year 2022 as a result of the error? 2.) Which of the following accounts is(are) overstated by 50,000 at the end of year 2023 as a result of the error? 3.) What would be the adjusting entry if the error is discovered in year 2022? 4.) What would be the adjusting entry if the error is discovered in year 2023? 5.) What would be the adjusting entry if the error is discovered in year 2024?
- Ray Company, your client, failed to record accrued rent income of P 25,000 as of December 31, 2022. Based on the foregoing, answer the following questions: Question 1: Which of the following accounts is(are) understated by P 25,000 at the end of year 2022 as a result of the error? Question 2: Which of the following accounts is(are) overstated by P 25,000 at the end of year 2023 as a result of the error? Question 3: What would be the adjusting entry if the error is discovered in year 2022? Question 4: What would be the adjusting entry if the error is discovered in year 2023? Question 5: What would be the adjusting entry if the error is discovered in year 2024?When preparing adjusting entries at December 31, 2022, DC Co. discovered that sales salaries of $65,000 had not been accrued at December 31 2021. If the error is not corrected, what is the effect on the 2021 and 2022 comparative financial statements? Question 11Answer a. Salaries and Wages Expense and total liabilities are understated in 2021. Salaries and Wages Expense and total liabilities are overstated in 2022. Retained Earnings is understated in 2021 and overstated in 2022. b. Salaries and Wages Expense is overstated in 2021 and understated in 2022. Retained Earnings is overstated and total liabilities are understated in 2021 but properly stated in 2022. c. Salaries and Wages Expense is understated in 2021 and overstated in 2022. Retained Earnings is overstated and total liabilities are understated in 2021 but properly stated in 2022. d. Salaries and Wages Expense and total liabilities are understated in 2021. Salaries and Wages Expense…The accountant for Healthy Life Company, a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($21,820) and (b) accrued wages ($6,770). Indicate the effect of each error, considered individually, on the income statement for the current year ended July 31. Also indicate the effect of each error on the July 31 balance sheet. Enter all amounts as positive numbers. Enter "0" in those spaces where there is no overstatement or no understatement. Error (a) The adjusting entry for unearned revenue earned during the year ($21,820) was omitted.
