PROBLEM 1 (ERROR CORRECTION) Koshu Co., a calendar year entity, contained the following independent errors at the end of each reporting period: (Amounts in thousands) 2019 40 under 12 under 68 under 2020 50 under Accounts Payable Depreciation Expense Merchandise Inventory 2018 20 over 16 under 33 over 45 under 97 over Accrued Income 33 over 25 under Unearned Income 56 under 14 under 85 over 27 over 45 under Advances to Suppliers 105 under Advances from Customers 82 over 71 under 68 under 85 under Accounts Receivable Accrued Expense Prepaid Expense 92 over 78 under 27 under 19 over 18 under 12 under 17 over Compute for the following: a. Net adjustments on 2018 and 2020 Profits b. Effects of errors on the 2019 and 2020 Accumulated Profits c. Net adjustments to 2018 and 2019 Working Capital d. Adjusted total 2018 and 2020 Total Assets assuming unadjusted balances of total assets of 2018 and 2020 were P890 and P920, respectively e. Effects of errors on 2018 and 2019 Total Liabilities

PROBLEM 1 (ERROR CORRECTION) Koshu Co., a calendar year entity, contained the following independent errors at the end of each reporting period: (Amounts in thousands) 2019 40 under 12 under 68 under 2020 50 under Accounts Payable Depreciation Expense Merchandise Inventory 2018 20 over 16 under 33 over 45 under 97 over Accrued Income 33 over 25 under Unearned Income 56 under 14 under 85 over 27 over 45 under Advances to Suppliers 105 under Advances from Customers 82 over 71 under 68 under 85 under Accounts Receivable Accrued Expense Prepaid Expense 92 over 78 under 27 under 19 over 18 under 12 under 17 over Compute for the following: a. Net adjustments on 2018 and 2020 Profits b. Effects of errors on the 2019 and 2020 Accumulated Profits c. Net adjustments to 2018 and 2019 Working Capital d. Adjusted total 2018 and 2020 Total Assets assuming unadjusted balances of total assets of 2018 and 2020 were P890 and P920, respectively e. Effects of errors on 2018 and 2019 Total Liabilities

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 14E: Refer to the information in E22-13. Required: Prepare the correcting journal entries if the company...

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Assuming a companys year-end inventory were overstated by $5,000, indicate the effect (overstated/understated/no effect) of the error on the following balance sheet and income statement accounts. A. Income Statement: Cost of Goods Sold B. Income Statement: Net Income C. Balance Sheet: Assets D. Balance Sheet: Liabilities E. Balance Sheet: Equity
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