The following are the financial statements of Owiki Sdn. Bhd. (Owiki): Owiki Sdn. Bhd. Statement of profit or loss for the year ended 31 May 2021 RM Revenue Cost of sales Gross profit Distribution costs Administrative expenses Profit from operation Investment income Finance cost Profit before tax Тах еxpenses Profit before tax 2,779,500 (1,400,500) 1,379,000 (640,000) (403,500) 335,500 7,000 (122,500) 220,000 (65,500) 154,500 Statements of financial position as at 31 May 2021 RM 2020 RM RM RM ASSETS Non-current assets Property, plant and equipment 766,300 690,350 Current assets 180,375 93,100 5,000 221,500 7,500 193,300 101,000 12,500 212,500 1,000 Inventories Trade receivables Prepaid interest Fixed deposits Cash at bank 507,475 1273,775 533,300 1,223,650 Total assets EQUITY AND LIABILITIES Equity Ordinary share capital Retained earnings 544,900 176,800 721,700 432,525 147,500 580,025 Non-current liability 5% Loan notes 270,175 340,050 Current liabilities Trade payables Тах раyable Bank overdraft 172,900 57,500 51,500 164,075 84,500 55,000 281,900 1,273,775 303,575 1,223,650 Total equities and liabilities

The following are the financial statements of Owiki Sdn. Bhd. (Owiki): Owiki Sdn. Bhd. Statement of profit or loss for the year ended 31 May 2021 RM Revenue Cost of sales Gross profit Distribution costs Administrative expenses Profit from operation Investment income Finance cost Profit before tax Тах еxpenses Profit before tax 2,779,500 (1,400,500) 1,379,000 (640,000) (403,500) 335,500 7,000 (122,500) 220,000 (65,500) 154,500 Statements of financial position as at 31 May 2021 RM 2020 RM RM RM ASSETS Non-current assets Property, plant and equipment 766,300 690,350 Current assets 180,375 93,100 5,000 221,500 7,500 193,300 101,000 12,500 212,500 1,000 Inventories Trade receivables Prepaid interest Fixed deposits Cash at bank 507,475 1273,775 533,300 1,223,650 Total assets EQUITY AND LIABILITIES Equity Ordinary share capital Retained earnings 544,900 176,800 721,700 432,525 147,500 580,025 Non-current liability 5% Loan notes 270,175 340,050 Current liabilities Trade payables Тах раyable Bank overdraft 172,900 57,500 51,500 164,075 84,500 55,000 281,900 1,273,775 303,575 1,223,650 Total equities and 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 10MC: Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended...

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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
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