Required: For each of the above independent and unrelated errors, determ the effect on the 2020 accounts. Prepare the journal entries ea company should record in 2021 to correct the errors. Assets Liabilities R/E Revenue Expense NI Error 1 Error 2 Error 3 Error #1 Correcting Entry: Error #2 Correcting Entry: Error #3 Correcting Entry:
Q: Although entries have been recorded all year, adjusting entries have not been recorded since…
A: Journal Entry - A journal entry records the business transaction in systematic manner either…
Q: Instruction: Using the expense method this time, prepare the original entry of the foregoing…
A: Adjusting entries are the journal entries which adjust the expenses and revenue in the year they…
Q: In examining the books of Ula Company, you found out that certain adjustments had been overlooked at…
A: When an error is detected, financial statements which have the impact of the errors are prepared…
Q: PA13.) Prepare adjusting journal entries, as needed, considering the account balances excerpted from…
A: Solution: Introduction: Adjusting Entries are the journal entries that are made at the end of a…
Q: Required: 1. Calculate Ingrid's balance in accounts receivable on December 31, 2019, prior to the…
A: Compute Ingrid’s balance in accounts receivable on December 31, 2019, prior to adjustment.
Q: 1. Calculate Smith's preadjustment balance in accounts receivable on December 31, 2019. $ 372,150 x…
A: Aging method: This is a method in which the receivables are sorted according to their collectable…
Q: The McDaniel Company operates using a calendar year-end. The following information pertains to…
A: Adjusting entries are the entries that are passed at the year-end but before the finalization of the…
Q: Russia Company, your client, failed to record prepaid insurance expense of P 120,000 as of December…
A: Accounting errors are mainly inadvertent errors that occur at the time of recording journal entries.…
Q: - Instruction: Fill in the blank on the type/nature of the adjustment or the pro-forma entry of the…
A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…
Q: How much uncollectible accounts expense should be presented on the statement of comprehensive income…
A: Accounting treatments of an account written off and recovery of account previously written off In…
Q: equired: 1.By how much would the December 31, 2021 retained earnings be misstated if no adjustments…
A: Journal entry is the practice of recording commercial transactions for the first time in the books…
Q: Which of the following adjusting entries prepared on December 31, 2021 (without amounts and…
A: Adjusting journal entry: At year-end when the company finalizes its accounts then any unrecognized…
Q: Prepare depreciation adjusting entries for each asset for the year ended December 31, 2021, assuming…
A: Introduction:- Depreciation is a non cash expenses. Depreciation is charged on fixed asset over a…
Q: High company, your client, failed to record accrued salaries expense of 50,000 as of December 31,…
A: Since you have posted question with multiple sub-parts , we will do the first three sub-parts for…
Q: 1. Calculate Ingrid's balance in accounts receivable on December 31, 2019, prior to the adjustment.…
A: Compute Ingrid’s balance in accounts receivable on December 31, 2019, prior to adjustment.
Q: Accrued salaries of P 20,000 was overlooked at the end of 2021. What would be the adjusting entry if…
A: Accrued salaries are salaries which are due for payment but not yet paid. If company has missed to…
Q: In year 2022, payment of rent for the month is debited to Rent Income. What is the effect of the…
A: Correct entry: Debit: Rent expense Credit: Cash Entry recorded: Debit: Rent income Credit: Cash…
Q: scovered the
A: Here we will take one by one tranasction and first will…
Q: Russia Company, your client, failed to record prepaid insurance expense of P 120,000 as of December…
A: Question 1 Prepaid insurance expenses will be overstated by 120000
Q: Required: 1. Prepare the journal entry at the beginning of 2021 to record the change in accounting…
A: Solution:- 1)Preparation of the journal entry at the beginning of 2021 to record the change in…
Q: Prepaid Insurance of P 60,000 was overlooked at the end of 2021. What would be the adjusting entry…
A: Note: overlooking of prepaid insurance means insurance expense are understated, due to which income…
Q: On December 31, 2020, Mickelson, Inc. fails to properly accrue incurred but unpaid year-end wages.…
A: As wages has not been paid and it is related to 2020 year. Hence following accrual entry should be…
Q: 1. Bad debts are recognized on both accrual and cash basis of accounting. True of False? 2.…
A: Ans. Accounting for bad debt is made on estimates of previous years. The Accounting entry has to be…
Q: Based on the information above, give the answer to the following questions by choosing from letters…
A: Hi student Since there are multiple subparts, we will answer only first three subparts.
Q: According to AASB110, which of the following is an adjusting event? Select one: a. All of the above…
A: As per AASB 110, the events that provides the evidence of the conditions that are in existence at…
Q: How to adjust (adjusting entries) this and write in general journal As of December 32,2020, Joy…
A: Adjusting journal entry: At year-end when the company finalizes its accounts then any unrecognized…
Q: Prepare correcting entries as of December 31, 2020 7. The delivery expense of P 1,800 incurred on…
A: When transactions occur as part of the business operations of a company, records will be made…
Q: i. Prepare a schedule showing the calculation of corrected income before tax for 2021 and 2020. ii.…
A: W.N.1) If closing inventory is overstated, the profit or income is also overstated and if it is…
Q: Accrued rent income of P 25,000 was overlooked at the end of 2021. What would be the adjusting entry…
A: Solution Concept Accrued income means the income that is earned but not received yet The accrued…
Q: Ginger Ltd is completing its financial statements for the year ended 30 June 2020. In undertaking…
A: As per IAS 8 ( Accounting policies, changes in Accounting estimates and Errors) , prior period…
Q: Required: Prepare a classified balance sheet at December 31, 2021, by updating ending balances from…
A: The question is based on the concept of Financial Accounting.
Q: Unearned Sales Revenue of P 120,000 was overlooked at the end of 2021. What would be the adjusting…
A: Unearned revenue refers to revenue received but not yet earned. Here, the unearned sales revenue…
Q: Using the Balance Day Adjustment journals below as an example, identify and explain the potential…
A: If any Balance Day Adjustment journals are not posted/ processed, then it may lead to…
Q: Accrued salaries of P 20,000 was overlooked at the end of 2021. What would be the adjusting entry if…
A: Note: Due to overlooking of accrued salaries, profit will be decline in the year of expense booking.…
Q: The company uses asset method to record payment for annual insurance amounting to P12,000.00. On…
A: "We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: 1. If the necessary adjusting journal entry is made regarding the case of Concordia, what is the…
A: The process of evaluating and analyzing the books of accounts and financial statements at the end of…
Q: tate the effect of the following errors if OVERSTATED, UNDERSTATED, or NO EFFECT. NO. ERRORS EFFECT…
A: Solution Concept Retained earnings is understated if net income is understated Retained earnings is…
Q: Lindy Company's auditor discovered several errors. No errors were corrected during 2020. The errors…
A: Prepaid insurance means the insurance amount is paid in advance. Adjustment of prepaid insurance…
Q: State the effect the following situation would have on the amount of annual net income reported for…
A: Unearned Revenue is money received from customer for which money has received but product/services…
Q: How should accounting errors discovered in the same accounting period they relate be correct. For…
A: Following is the answer to the given question.
Q: Prepare an adjusted trial balance. If an amount Ledger Accounts, Adjusting Entries, Financial…
A: 1,3 and 6:
Q: In year 2022, payment of rent for the month is debited to Rent Income. What is the effect of the…
A: Solution Concept When the expense is not recorded the effect is understatement of the expenses and…
Q: Unearned Sales Revenue of P 120,000 was overlooked at the end of 2021. What would be the adjusting…
A: A situation of Unearned Revenue arises when any advance has been collected from customers but no…
Q: Belarus Company, your client, failed to record accrued rent income of P 25,000 as of December 31,…
A: Accrued rent income is the income earned this year but not received till the year end. Adjusting…
Q: Prepare the journal entry to record the impairment at December 31, 2020. (If no entry is required,…
A: Impairment of assets means reducing the book value of assets when carrying amount is more than…
Q: Accrued rent income of P 25,000 was overlooked at the end of 2021. What would be the adjusting entry…
A: Accured income means income earned but yet not received. Following is the adjustment entry for…
Q: A revenue was earned in 2019 but payment is not received until 2020. Using the accrual basis of…
A: Introduction: Accrual basis of Accounting: Recording of a transactions irrespective of cash paid or…
Q: Required: (a) Prepare journal entries to record the impairment loss of receivable in 2021 under…
A: Accounts receivables are those customer accounts to whom credit sales has been made and amount has…
Step by step
Solved in 3 steps
- Accruals and Deferrals For the following situations, indicate whether each involves a deferred expense (DE), a deferred revenue (DR), an accrued liability (AL), or an accrued asset (AA). Example: DE Office supplies purchased in advance of their use __________ 1. Wages earned by employees but not yet paid __________ 2. Cash collected from subscriptions in advance of publishing a magazine __________ 3. Interest on a customer loan for which principal and interest have not yet been collected __________ 4. One years premium on life insurance policy paid in advance __________ 5. Office building purchased for cash __________ 6. Rent collected in advance from a tenant __________ 7. State income taxes owed at the end of the year __________ 8. Rent owed by a tenant but not yet collectedThe balance in the unearned rent account for Jones Co. as of December 31 is $1 ,20(). If Jones Co. failed to record the adjusting entry for $600 of rent earned during December, the effect on the balance sheet and income statement for December would 1w: A. Assets understated by $600; net income overstated by $600. B. Liabilities understated by $600; net income understated by $600. C. Liabilities overstated by $600; net income understated by $600. D. Liabilities overstated by $600; net income overstated by $600.Unearned Revenue Jennifers Landscaping Services signed a $400-per-month contract on November 1, 2019, to provide plant watering services for Lola Inc.s office buildings. Jennifers received 4 months' service fees in advance on signing the contract. Required: 1. Prepare Jennifers journal entry to record the cash receipt for the first 4 months. 2. Prepare Jennifers adjusting entry at December 31, 2019. 3. CONCEPTUAL CONNECTION How would the advance payment (account(s) and amounts(s)] be reported in Jennifers December 31, 2019, balance sheet? How would the advance payment [account(s) and amount(s)] be reported in Lolas December 31, 2019, balance sheet?
- Assume that a lawyer bills her clients $15000 on June 30, for services rendered during June. The lawyer collects $8500 of the billings during July and the remainder in August. Under the accrual basis of accounting, when would the lawyer record the revenue for the fees? A. June, $15,000; July, $0; and August, $0 B. June, $0; July, $6,500; and August, $8,500 C. June, $8,500; July, $6,500; and August, $0 D. June, $0; July, $8,500; and August, $6,500Valley Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on July 31, 2019, follows: The following business transactions were completed by Valley Realty during August 2019: Aug. 1. Purchased office supplies on account, 3,150. 2.Paid rent on office for month, 7,200. 3.Received cash from clients on account, 83,900. 5.Paid insurance premiums, 12,000. 9.Returned a portion of the office supplies purchased on August 1, receiving full credit for their cost, 400. Analyzing Transactions Aug. 17. Paid advertising expense, 8,000. 23.Paid creditors on account, 13,750. Enter the following transactions on Page 19 of the two-column journal: 29.Paid miscellaneous expenses, 1,700. 30.Paid automobile expense (including rental charges for an automobile), 2,500. 31.Discovered an error in computing a commission during July; received cash from the salesperson for the overpayment, 2,000. 31.Paid salaries and commissions for the month, 53,000. 31.Recorded revenue earned and billed to clients during the month, 183,500. 31.Purchased land for a future building site for 75,000, paying 7,500 in cash and giving a note payable for the remainder. 31.Withdrew cash for personal use, 1,000. 31.Rented land purchased on August 31 to a local university for use as a parking lot during football season (September, October, and November); received advance payment of 5,000. Instructions 1. Record the August 1 balance of each account in the appropriate balance column of a four-column account, write Balance in the item section, and place a check mark () in the Posting Reference column. 2. Journalize the transactions for August in a two-column journal beginning on Page 18. Journal entry explanations may be omitted. 3. Post to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance of the ledger as of August 31, 2019. 5. Assume that the August 31 transaction for Cindy Getmans cash withdrawal should have been 10,000. (a) Why did the unadjusted trial balance in (4) balance? (b) Journalize the correcting entry. (c) Is this error a transposition or slide?Taylor Company recently purchased a piece of equipment for $2,000 which will be paid within 30 days after delivery. At what point would the event be recorded in Taylors accounting system? When Taylor signs the agreement with the seller When Taylor receives an invoice (a bill) from the setter When Taylor receives the asset from the seller When Taylor pays $2.000 cash to the seller
- 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.On September 1, a company received an advance rental payment of $12,000, to cover six months rent on an office building. There was no beginning balance in the Unearned Rent account for the period. Based on the information provided, A. Make the December 31 adjusting journal entry to bring the balances to correct. B. Show the impact that these transactions had.Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on March 31, 2019, follows: The following business transactions were completed by Elite Realty during April 2019: Apr. 1. Paid rent on office for month, 6,500. 2.Purchased office supplies on account, 2,300. 5.Paid insurance premiums, 6,000. 10.Received cash from clients on account, 52,300. 15.Purchased land for a future building site for 200,000, paying 30,000 in cash and giving a note payable for the remainder. 17.Paid creditors on account, 6,450. 20.Returned a portion of the office supplies purchased on April 2, receiving full credit for their cost, 325. 23.Paid advertising expense, 4,300. Enter the following transactions on Page 19 of the two-column journal: 27.Discovered an error in computing a commission; received cash from the salesperson for the overpayment, 2,500. 28.Paid automobile expense (including rental charges for an automobile), 1,500. 29.Paid miscellaneous expenses, 1,400. 30.Recorded revenue earned and billed to clients during the month, 57,000. 30.Paid salaries and commissions for the month, 11,900. 30.Withdrew cash for personal use, 4,000. 30.Rented land purchased on April 15 to local merchants association for use as a parking lot in May and June, during a street rebuilding program; received advance payment of 10,000. Instructions 1. Record the April 1, 2019, balance of each account in the appropriate balance column of a four-column account, write Balance in the item section, and place a check mark () in the Posting Reference column. 2. Journalize the transactions for April in a two-column journal beginning on Page 18. Journal entry explanations may be omitted. 3. Post to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance of the ledger as of April 30, 2019. 5. Assume that the April 30 transaction for salaries and commissions should have been 19,100. (a) Why did the unadjusted trial balance in (4) balance? (b) Journalize the correcting entry. (c) Is this error a transposition or slide?
- 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 9,800Worksheet for Service Company Whitaker Consulting Company has prepared a trial balance on the following partially completed worksheet for the year ended December 31, 2019: Additional information: (a) On January 1, 2019, the company had paid 2 years rent in advance at 100 a month for office space, (b) the office equipment is being depreciated on a straight-line basis over a 10-year life, and no residua! value is expected, (c) interest of 150 has accrued on the note payable but has not been paid, and (d) the income tax rate is 30% on current income and will be paid in the first quarter of 2020. Required: 1. Complete the worksheet. 2. Prepare financial statements for 2019.Write-Off of Uncollectible Accounts King Enterprises had 27 customers utilizing its financial planning services in 2019. Each customer paid King $25,000 for receiving Kings assistance. King estimates that 2% of its $675,000 credit sales in 2019 will be uncollectible. During 2020, King wrote off $2,700 related to services performed in 2019. Required: 1. Prepare the journal entry to record the defaulted balance. 2. Prepare the adjusting entry to record the bad debt expense for 2019.