b. Uncollectable Debts written off amounted to R1 500 during 2020.3. Cash received from customers for the year amounted to R145 000.4. The business utilised the perpetual inventory system to record inventory.5. Cash payments made to suppliers for the credit purchase of inventory amounted to R95 000.6. During the year, R5 670 worth of credit notes were received from suppliers for the return ofinventory purchased on credit.7. Included in accounts payable the following amounts owing to suppliers for the purchase ofinventory amounted to:а.At 31 December 2019: R12 000b. At 31 December 2020: R20 0008. Distributions to the owner amounted to R5 000.9. The owner contributed R6 000 worth of furniturebe used by the business during the 2020financial year.10. No other capital contributions were made during the year.Required:1) Calculate the value of Sales that will be reported in the Statement of Profit and Loss for theperiod ended 31 December 2020.2) Calculate the value of Cost of Sales that will be reported in the Statement of Profit and Lossfor the period ended 31 December 2020.3) Calculate the Net Profit for the period ended 31 December 2020.4) Calculate the total operating expenses incurred for the period ended 31 December 2020. (Ignore VAT)Looking Glass is a window repair business and has a year end of 31 December. The followingStatement of Financial Position was reported for the year ended 31 December 2020:Looking GlassStatement of Financial Position at 31 December 202031/12/202031/12/2019RASSETSNon-current AssetsFurniture and fittings52 00050 000Cost66 00060 000Accumulated depreciation000)Current Assets74 00059 200Inventory32 00030 000Accounts Receivable30 00019 200Bank12 00010 000126 000109 200EQUITY AND LIABILITIESEquityСapital104 00094 200Current LiabilitiesAccounts Payable22 00015 000126 000109 200The following information is available:5/71. All sales are made on credit.2. Accounts Receivable is reported at the carrying value after taking into account:а.Allowance for Doubtful Debts amounted to R4 800 at 31 December 2019 and R7 500at 31 December 2020.

Name: b. Uncollectable Debts written off amounted to R1 500 during 2020.3.
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Description: b. Uncollectable Debts written off amounted to R1 500 during 2020.3. Cash received from customers for the year amounted to R145 000.4. The business utilised the perpetual inventory system to record inventory.5. Cash payments made to suppliers for th

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Looking Glass is a window repair business and has a year end of 31 December. The following Statement of Financial Position was reported for the year ended 31 December 2020: Looking Glass Statement of Financial Position at 31 December 2020 31/12/2020 31/12/2019 ASSETS Non-current Assets Furniture and fittings 52 000 50 000 Cost 66 000 60 000 Accumulated depreciation (14 000) (10 000) Current Assets 74 000 59 200 Inventory 32 000 30 000 Accounts Receivable 30 000 19 200 Bank 12 000 10 000 126 000 109 200 EQUITY AND LIABILITIES Equity Capital 104 000 94 200 Current Liabilities Accounts Payable 22 000 15 000 126 000 109 200 The following information is available: 1. All sales are made on credit. 2. Accounts Receivable is reported at the carrying value after taking into account: a. Allowance for Doubtful Debts amounted to R4 800 at 31 December 2019 and R7 500 at 31 December 2020.

Looking Glass is a window repair business and has a year end of 31 December. The following Statement of Financial Position was reported for the year ended 31 December 2020: Looking Glass Statement of Financial Position at 31 December 2020 31/12/2020 31/12/2019 ASSETS Non-current Assets Furniture and fittings 52 000 50 000 Cost 66 000 60 000 Accumulated depreciation (14 000) (10 000) Current Assets 74 000 59 200 Inventory 32 000 30 000 Accounts Receivable 30 000 19 200 Bank 12 000 10 000 126 000 109 200 EQUITY AND LIABILITIES Equity Capital 104 000 94 200 Current Liabilities Accounts Payable 22 000 15 000 126 000 109 200 The following information is available: 1. All sales are made on credit. 2. Accounts Receivable is reported at the carrying value after taking into account: a. Allowance for Doubtful Debts amounted to R4 800 at 31 December 2019 and R7 500 at 31 December 2020.

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10MC: Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended...

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Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense at December 31, 2020, if the double-declining-balance method were used? a. $187,200 b. $192,000 c. $195,200 d. $312, 000
Spreadsheet The following 2019 information is available for Payne Company: Partial additional information: The net income for 2019 totaled 1,600. During 2019, the company sold, for 390, equipment that cost 390 and had a book value of 300. The company sold land for 200, resulting in a loss of 40. The remaining change in the Land account resulted from the purchase of land through the issuance of common stock. Required: Making whatever additional assumptions that are necessary, prepare a spreadsheet to support the 2019 statement of cash flows for Payne.
Adjustment for depreciation The estimated amount of depredation on equipment for the current year is $133,000. a. How is the adjustment recorded? Indicate each account affected, whether the account is increased or decreased, and the amount of the increase or decrease. b. If the adjustment in (a) was omitted, which items would be erroneously stated on (1) the income statement for the year and (2) the balance sheet as of December 31?
Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense for 2019 if the units-of-production method were used ( Note: Round your answer to the nearest dollar)? a. $179,400 b. $184,000 c. $218,400 d. $224,000
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
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 balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before any necessary year-end adjustment relating to the following: Goods were in transit from a vendor to Ashwood on December 31, 2019. The invoice cost was 85,000, and the goods were shipped FOB shipping point on December 29, 2019. The goods were received on January 2, 2020. Goods shipped FOB shipping point on December 20, 2019, from a vendor to Ashwood were lost in transit. The invoice cost was 40,000. On January 5, 2020, Ashwood filed a 40,000 claim against the common carrier. Goods shipped FOB destination on December 22, 2019, from a vendor to Ashwood were received on January 6, 2020. The invoice cost was 20,000, What amount should Ashwood report as accounts payable on its December 31,2019, balance sheet? a. 1,260,000 b. 1,285,000 c. 1,325,000 d. 1,345,000
Using the following information, A. Make the December 31 adjusting journal entry for depreciation. B. Determine the net book value (NBV) of the asset on December 31. Cost of asset, $195,000 Accumulated depreciation, beginning of year, $26,000 Current year depreciation, $13,000
At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry for each situation to record the depreciation for 2020. Ignore income taxes.
During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.
Vorst depreciates Asset A on the double-declining-balance method. How much depreciation expense should Vorst record in 2020 for Asset A? a. 32,000 b. 25,600 c. 14,400 d. 6,400
Soon after December 31, 2019, the auditor requested a depreciation schedule for trucks of Jarrett Trucking Company, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period 2016 to 2019, inclusive. The following data were in the Trucks account as of January 1, 2016: The Accumulated DepreciationTrucks account, previously adjusted to January 1,2016, and duly entered in the ledger, had a balance on that date of 16,460. This amount represented the straight-line depreciation on the four trucks from the respective dates of purchase, based on a 5-year life and no residual value. No debits had been made to this account prior to January 1, 2016. Transactions between January 1,2017, and December 31, 2019, and their record in the ledger were as follows: 1. July 1, 2016: Truck no. 1 was sold for 1,000 cash. The entry was a debit to Cash and a credit to Trucks, 1,000. 2. January 1, 2017: Truck no. 3 was traded for a larger one (no. 5) with a 5-year life. The agreed purchase price was 12,000. Jarrett paid the other company 1,780 cash on the transaction. The entry was a debit to Trucks, 1,780, and a credit to Cash, 1,780. 3. July 1, 2018: Truck no. 4 was damaged in a wreck to such an extent that it was sold as junk for 50 cash. Jarrett received 950 from the insurance company. The entry made by the bookkeeper was a debit to Cash, 1,000, and credits to Miscellaneous Revenue, 50, and Trucks, 950, 4. July 1, 2018: A new truck (no. 6) was acquired for 20,000 cash and debited at that amount to the Trucks account. The truck has a 5-year life. Entries for depreciation had been made at the close of each year as follows: 2016, 8,840; 2017, 5,436; 2018, 4,896; 2019, 4,356. Required: 1. Next Level For each of the 4 years, calculate separately the increase or decrease in earnings arising from the companys errors in determining or entering depreciation or in recording transactions affecting trucks. 2. Prove your work by one compound journal entry as of December 31, 2019; the adjustment of the Trucks account is to reflect the correct balances, assuming that the books have not been closed for 2019.