lowing errors in the the Emma Company reveale financial statements: 500,000 800,000 250,000 December 31, 2020 inventory understated December 31, 2021 inventory overstated Depreciation for 2020 overstated 300.000 150,000 December 31, 2021 accrued rent income overstated December 31, 2021 accrued salaries understated The understatement of the 2020 ending inventory pertains to goods in transit purchased FOB shipping point which were not recorded in 2020 but paid in 2021. On December 31, 2021, fully depreciated machinery was sold for P100,000 cash but the sale was not recorded until 2022
lowing errors in the the Emma Company reveale financial statements: 500,000 800,000 250,000 December 31, 2020 inventory understated December 31, 2021 inventory overstated Depreciation for 2020 overstated 300.000 150,000 December 31, 2021 accrued rent income overstated December 31, 2021 accrued salaries understated The understatement of the 2020 ending inventory pertains to goods in transit purchased FOB shipping point which were not recorded in 2020 but paid in 2021. On December 31, 2021, fully depreciated machinery was sold for P100,000 cash but the sale was not recorded until 2022
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 21GI: Indicate the effect of each of the following errors on the following balance sheet and income...
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Question
What amount should be reported as net effect of the errors on net income for 2020?*
a. 250000 understated
b. 250000 overstated
c. 500000 understated
d. 0
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