PROBLEM 6-3 Counterbalancing ErrorsPhcovered the following errors in connection with your examination of theeancial statements of Girlie Corporation:Purchase of merchandise on account on December 27, 2020 amounting toPS0,000 was not recorded until it was paid in January 2021. Themerchandise was properly included in the ending inventory in 2020.9 Sale of merchandise on account on December 29, 2020 amounting to P70,000was not recorded until it was collected in January 2021. The merchandisewas properly excluded in the ending inventory in 2020.1 On December 31, 2020, the ending inventory was understated by P20,000.The following data were extracted from the financial statements of GirlieCorporation:20202021Net incomeWorking capitalRE, end of the year100,000300,000100,000150,000400,000250,000Questions:Based on the above data, determine the following:1. Net income in 2020a. P140,000b. P70,000c. P50,000d. P120,0002 Working capital, end of 2020a. P340,000b. P320,000c. P390,000d. P250,0003. Retained earnings, end of 2020a. P140,000b. P70,000c. P50,000d. P120,0004. Net income in 2021a. P110,000b. P120,000c. P130,000d. P140,0005. Working capital, end of 2021a. P420,000b. P400,000c. P450,000d. P330,0006. Retained earnings, end of 2021a. P250,000b. Р300,000c. P230,000d. P180,0007. Prepare adjusting entries assuming errors were discovered in (a) 2020, (b)2021, and (c) 2022.

Since, it is a multiple sub part question, as per guidelines, we shall answer only the first 3…

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Business

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Net income Working capital RE, end of the yea estions: above

Corporate Financial Accounting

15th Edition

ISBN:9781337398169

Author:Carl Warren, Jeff Jones

Publisher:Carl Warren, Jeff Jones

Chapter5: Accounting For Retailing Businesses

Section: Chapter Questions

Problem 5.44EX: Appendix 2 Cost of goods sold Identify the errors in the: following schedule of the cost of goods...

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Question

PROBLEM 6-3 Counterbalancing Errors
Phcovered the following errors in connection with your examination of the
eancial statements of Girlie Corporation:
Purchase of merchandise on account on December 27, 2020 amounting to
PS0,000 was not recorded until it was paid in January 2021. The
merchandise was properly included in the ending inventory in 2020.
9 Sale of merchandise on account on December 29, 2020 amounting to P70,000
was not recorded until it was collected in January 2021. The merchandise
was properly excluded in the ending inventory in 2020.
1 On December 31, 2020, the ending inventory was understated by P20,000.
The following data were extracted from the financial statements of Girlie
Corporation:
2020
2021
Net income
Working capital
RE, end of the year
100,000
300,000
100,000
150,000
400,000
250,000
Questions:
Based on the above data, determine the following:
1. Net income in 2020
a. P140,000
b. P70,000
c. P50,000
d. P120,000
2 Working capital, end of 2020
a. P340,000
b. P320,000
c. P390,000
d. P250,000
3. Retained earnings, end of 2020
a. P140,000
b. P70,000
c. P50,000
d. P120,000
4. Net income in 2021
a. P110,000
b. P120,000
c. P130,000
d. P140,000
5. Working capital, end of 2021
a. P420,000
b. P400,000
c. P450,000
d. P330,000
6. Retained earnings, end of 2021
a. P250,000
b. Р300,000
c. P230,000
d. P180,000
7. Prepare adjusting entries assuming errors were discovered in (a) 2020, (b)
2021, and (c) 2022.

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