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- Analyzing the effect of prior-period adjustments Taylor Corporation discovered in 2019 that it had incorrectly recorded in 2018 a cash payment of $70,000 for utilities expense. The correct amount of the utilities expense was $35,000. Requirements Determine the effect of the error on the accounting equation in 2018. How should this error be reported in the 2019 financial statements?Analyzing the effect of prior-period adjustments Taylor Corporation discovered in 2019 that it had incorrectly recorded in 2018 a cash payment of $70,000 for utility expense. The correct amount of the utility expense was $35,000. Requirements Determine the effect of the error on the accounting equation in 2018. How should this error be reported in the 2019 financial statements?By how much would the December 31, 2021 retained earnings be misstated if no adjustments were made for the above errors? Compute for the adjusted net income for the year 2021. *
- In 2021, Winslow International, Inc.’s controller discovered that ending inventories for 2019 and 2020 were overstated by $200,000 and $500,000, respectively. Determine the effect of the errors on retained earnings at January 1, 2021. (Ignore income taxes.)If the errors were discovered in January 2018, what must be the entry to adjust 2017 Net Income/Retained Earnings assuming the books in 2017 are already closed?Use the following information to provide the adjusting journal entry that Chipotle should have made on December 31, 2020which was the end of the fiscal year 2020. Assume that Chipotle makes adjusting entries once a year at fiscal year end. At the end of fiscal year 2020, Chipotle owed employees $203 million related to work completed (but not yet paid) during fiscal year 2020. What adjusting journal entry should Chipotle make on December 31, 2020 related to these wages owed to employees? Account Title Debit Credit Salary expense 203 Salary payable 203 At the end of fiscal year 2020, Chipotle calculates that it has $105 million in sales on account that have not yet been received or recorded. What adjusting journal entry should Chipotle make on December 31, 2020 related to the sales on account? Account Title Debit Credit Accounts receivable 105 Sales revenue 105 Chipotle receives a utility bill every four weeks…
- In 2021, Winslow International, Inc.’s controller discovered that ending inventories for 2019 and 2020 were overstated by $220,000 and $520,000, respectively.Determine the effect of the errors on retained earnings at January 1, 2021. (Ignore income taxes.)Indicate whether they are adjusting and non-adjusting events and how they should be treated according to the standard. Facey Company Ltd.’s financial year ends on 31 December. On 20 December 2019, Facey Company Ltd was involved in a court case with a customer who sued the company for delivering products where there was a dispute over the exact ingredients included in the products manufactured by Facey Company Ltd. These products were delivered to the customer in October 2013. The details of the case were heard by 22 December, but the judge decided to reserve her judgment until 8 January 2020. On 8 January 2020, the judge ruled in favour of the customer, awarding it damages of $100,000.A. By how much would the December 31, 2021 retained earnings be misstated if no adjustments were made for the above errors? B. Compute for the adjusted net income for the year 2021.
- At the end of 2019, Framber Company received $8000 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.Abrat Company failed to accrue an allowance for doubtful accounts of 13,500 in 2019. Upon discovery of this error in 2020 prior to making its estimate of doubtful accounts, what correcting journal entry should Abrat make? 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.