If a company produced a net income of P28,000.00 but failed to adjust for P1,500 in depreciation of equipment and P1,400 in accrued wages. Explain how this errors affected the net income. What will be the corrected net income.
Q: Net profit was calculated as being $10,200. It was later discovered that capital expenditure of…
A: We have the following information: Calculated Net profit: $10,200 Capital Expenditure later…
Q: " If the accountant did not prepare the elimination entry of unrealized profit in inventories at the…
A: Unrealized Profit on Inventory at the end of the year means that the inventory is recorded at…
Q: (Error Analysis and Correcting Entry) The reported net incomes for the first 2 years of Sandra…
A: Following is the statement which will show the effect of rectification of errors on net earnings:…
Q: Salaries payable amounting to P 34,000 was not recorded in 2021. Accrued vacation pay for the year…
A: Rectification of error refers to the process of finding out the mistakes made in recording the…
Q: Records showed that as of December 31, 2020, accrued salaries payable of P21,000 were not recorded…
A: Records appearing on 31st December 2020 which were not recorded or error appeared are as follows:-…
Q: The net income reported on the ABC Co.'s income statement is $150,000. However, adjusting entries…
A: The correct answer is Option (e).
Q: At the end of the current year, a company overstated prepaid insurance by $62,000 and understated…
A: Solution: Total under statement of expenses = Insurance expense + Supplies expense =$62,000 +…
Q: identify whether it is treated as a prior period adjustment or change in accounting estimate. Upon…
A: Definition: Errors not affecting trial balance: An error is a mistake committed in the process of…
Q: he following transactions took place during 2021 and were not recorded in the book’s of Monpa: 1.…
A: Journal : It is the primary book of accounts where all the business transaction are recorded at…
Q: Winnie Ltd. provides computer services to business customers. In 2020, the Company failed to record…
A: Accrued service revenue is that revenue from sale of goods and services in the business, which is…
Q: A company forgot to record accrued and unpaid wages of $500,000 at the end of period. What world be…
A: Outstanding expenses are the expenses which are incurred but not paid yet. Such expenses are treated…
Q: For the year ending August 31, Mammalia Medical Co. mistakenly omitted adjusting entries for (1)…
A: Adjusting entries: Adjusting entries refers to the entries that are made at the end of an accounting…
Q: mpany has a 7% profit margin and discovered employee fraud of $770,000 for the year. Calculate the…
A: Explanation of Concept Profit margin is the amount which is calculated as follows Profit Margin =…
Q: The company recorded a net loss of P185,000 for the year just ended. Total operating expenses was…
A: Gross profit = net income(loss) + Total operating expenses Net sales = Gross profit + cost of sales…
Q: Oriole Company discovered the following errors made in January 2020. A payment of Salaries and Wages…
A: The incorrect entries are corrected after reversing the previous incorrect entries.
Q: Happy Company provided the following profit(loss) relating to operating segments:A- 2,000,000; B -…
A: Reportable Segments are those segments of the company that needs to be reported separately from…
Q: While examining the accounts of Company on December 31, 2020, the following errors were uncovererd:…
A:
Q: ABC company recorded a net loss of P215,000 for the year just ended. Total operating expenses was…
A: Gross profit = net income(loss) + Total operating expenses Net sales = Gross profit + cost of sales…
Q: Squires & Johnson, Ltd., recorded €250,000 of depreciation expense in December 2005. Th e most…
A: Accounting: Accounting is a system, or a process of collecting and organizing economic…
Q: These errors were discovered in the account of Golden Arches Company: Salaries payable amounting to…
A: Following is the error correction.
Q: Classify each of the following accounting practices as conservative or aggressive. 1. Increase the…
A:
Q: The following pretax amounts pertain to Company for the year ended December 31, 2020:Sales…
A: Retained earning means amount of profit remain after all the adjustment of expense and various…
Q: If a company produced a net income of P28,000.00 but failed to adjust for P1,500 in depreciation of…
A: Net income of the business will be calculated by deducting all the expenses from the total income or…
Q: Before any year-end adjustments were made, the profit of Pedro Co. was P2,000,000. However, the…
A: Adjusting journal entry: To record any unrecognized income or expenses for the period company made…
Q: The net income per books of Kimberly Young Company was determined without knowledge of the errors…
A: While calculating net income , closing stock is shown on income side and opening stock on expenses…
Q: B. While examining the accounts of Granny Co. on December 31, 2020, the following errors were…
A: Part1: Corrected Net Income of 2019 Unadjusted Net Income of 2019…
Q: At the end of the year, the usual adjusting entry for deprecation on a truck was not done. Which of…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: The following income statement was prepared by an office clerk hired for Juiy. Jou recognize that it…
A: Answer: Income statement is the statement which is prepared with details for revenue and expenses to…
Q: Tisdale Incorporated reports the following amount in its December 31, 2021, income statement Sales…
A: Formulas:
Q: Clock Company showed the following errors in their account during December 31, 2021: Dividends of P…
A: Solution Concept Failure to record dividend has no impact on the net income as dividend paid is the…
Q: Happy Company provided the following profit(loss) relating to operating segments: A- 2,000,000; B -…
A: Accounting standard related with segment reporting means all rules, regulations and guidelines…
Q: Below are three independent and unrelated errors. On December 31, 2017, Wolfe-Bache Corporation…
A: Solution:- Explanation of the effect of each error on the income statement and the balance sheet in…
Q: Happy Company provided the following profit(loss) relating to operating segments: A- 2,000,000; B -…
A: An entity shall report separately information about an operating segment that meets the following…
Q: Sandhill Company discovered the following errors made in January 2020. 1. A payment of Salaries…
A: Debit what comes in, Credit what goes out . Debit All expenses and losses , Credit all incomes and…
Q: The company recorded a net loss of P175,000 for the year just ended. Total operating expenses was…
A: Gross sales are the total of sale transactions before discount, sales return and sales allowance.
Q: Inits income statement for the year ended December 31, 2020, Pina Company reported the following…
A: Income statement forms a part of financial statement of an entity and is prepared with a view to…
Q: I am not sure what math to use for the correct number? I put 59,000 but it was wrong , can you help?…
A: Income summary is prepared to find out profit or loss of current period only. If there is profit ,…
Q: The adjusted trial balance of Liberty Company Included the following accounts for the current year:…
A: Comprehensive income: It is the net income generated by a company by all sources and operations.…
Q: The following are independent events. For each change or error select how it would be accounted for.…
A: ‘’Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: In 2016, Winslow International, Inc.’s controller discovered that ending inventories for 2014 and…
A: Inventory error:Inventory errors are sometimes caused by making mistake in physical count, in…
Q: The company recorded a net loss of P245,000 for the year just ended. Total operating expenses was…
A: Formula: Net Profit = Gross Sales – Sales Discounts – Cost of Sales – Operating Expenses
Q: The company reported a net loss of P40,000. Its net sales was P200,000 and gross profit was 40% of…
A: Gross profit = 40% of net sales = P200,000 x 40% = P80,000
Q: (Gungchil Express forgot to adjust the accrued service revenue of Tk. 50,000. What would be its…
A: It is such type o revenue which is earned by providing a good or service but no cash has been…
Q: If a business receives P 10,000 on account from a client who owed money for services previously…
A: Note: “Since you have asked multiple questions, we will solve the first question for you. If you…
Q: The following information is available for Northwest Enterprises Ltd., for the year ended December…
A: given The following information is available for Northwest Enterprises Ltd., for the year ended…
Q: A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This…
A:
Q: Clock Company showed the following errors in their account during December 31, 2021: • Dividends of…
A: Solution Concept Failure to record dividend has no impact on the net income as dividend paid is the…
Step by step
Solved in 2 steps
- 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 9,800Records showed that as of December 31, 2020, accrued salaries payable of P21,000 were not recorded in Company’s books. In addition, office supplies on hand of P9,000 at December 31, 2020 were erroneously treated as expense instead of supplies inventory. Neither of these errors was discovered nor corrected. What is the effect of these two errors? A. 2020 net income and December 31, 2020 accumulated profits are understated by P9,000 each. B. 2019 net income is overstated by P12,000 and 2020 net income is understated by P9,000 C. 2019 net income and December 31, 2019 accumulated profits are understated by P21,000 each. D. 2020 net income is understated by P30,000 and January 1, 2021 accumulated profits is understated by P9,000The following pretax amounts pertain to Helsinki Company for the yearended December 31, 2021: Sales, P800,000; Distribution andadministrative costs, P84,000; Other income, P40,000; Interest expense, P4,000; Cost of goods sold, P480,000; Correction of priorperiod error (credit), P16,000; Discontinued operations (debit),P40,000; Cumulative effect of change in accounting policy (credit),P28,000; Retained earnings, January 1 (not restated), P160,000; Dividends declared, P12,000; Income tax rate is 30% How much retained earnings would be shown on December 31, 2021 statement of financial position?
- In 2011, Milford Corporation determined that it overstated salaries payable and salaries expense by P20,000 in 2010. In 2011, which of the following accounts will have to be credited to correct this error? Choices; Salaries Payable. Salaries Expense. Retained Earnings. Income Summary.Squires & Johnson, Ltd., recorded €250,000 of depreciation expense in December 2005. Th e most likely eff ect on the company’s accounting equation is: A . no eff ect on assetsRay 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?
- Happy Company provided the following profit(loss) relating to operatingsegments: A- 2,000,000; B - (3,000,000); C- (500,000); D- 1,000,000.What is the minimum revenue of a reportable segment?At the end of Year 1, Ritzcar Co. failed to accrue sales commissions earned during Year 1 but paid in Year 2. The error was not repeated in Year 2. What was the effect of this error on Year 1 ending working capital and on the Year 2 ending retained earnings balance? Year 1 Ending Working Capital Year 2 Ending Retained Earnings A Overstated Overstated B No effect Overstated C No effect No effect D Overstated No effect1. What is the total effect of the errors on the 2020 net income? a. Overstated by P80,400b. Understated by P775,800c. none of the choicesd. Understated by P1,236,600e. Overstated by P165,000 2. What is the total effect of the errors on the balance of the company's retained earnings at December 31. 20217 a. Understated by P155,100b. none of the choicesc. Understated by P265,800d. Overstated by P930,900e. Overstated by P885,900
- Your examination of the financial statements of water Corporation revealed the following errors were made in the preparation of the 2017 financial statements: a. The depreciation expense in 2017 was recorded as P100,000, instead of P10,000b. Sales made in December 2017 for P150,000 were recorded in January 2018c. Rent paid on April 30, 2017 covering a one-year period was recognized as expense in 2017. Unexpired portion of P40,000 was not recorded at year-endd. Advances from customers amounting to P25,000 were recognized as sales in 2017. The goods were shipped in 2018.e. Salaries totaling to P50,000 was not recorded at year-end. The expense was recorded upon payment in 2018.f. Collections of accounts receivable in 2017 amounting to P20,000 were recorded in 2018.g. The unadjusted net income for 2017 is P650,000 Required: What is the net effect of the errors in the working capital at the end of 2017 and 2018?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 10,500 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 the end of 2020 and 2021, respectively. What is the net effect of the error in the 2021 net income? a.P 59,500 over b.P 72,200 under c.P 75,000 over d.P 70,000 overIn 2018, Winslow International, Inc.’s controller discovered that ending inventories for 2016 and 2017 wereoverstated by $200,000 and $500,000, respectively. Determine the effect of the errors on retained earnings atJanuary 1, 2018. (Ignore income taxes.)