Upon inspection of the records of Eisenhower Company in connection to its financial statement audit for the year ended December 31, 2022, the following errors were revealed: A fire insurance premium of P 40,000 was paid and charged to insurance expense in 2021. This covers one year from April 1, 2021. Inventory at December 31, 2020 was understated by P 80,000. Inventory at December 31, 2021 was understated by P 120,000. • The year 2021 last quarter taxes amounting to P 60,000 were paid on January 19, 2022 and charged to expense account of 2022
Q: Clock Company showed the following errors in their account during December 31, 2021: Dividends of P...
A: Solution Concept Failure to record dividend has no impact on the net income as dividend paid is the ...
Q: On January 1, 2018, Morrow Inc. purchased a spooler at a cost of $40,000. The equipment is expected ...
A: Depreciation refers to the permanent/fall/decline/decrease in the value of asset pertaining to many ...
Q: 1. Z. Net, an accountant, owns a business with the following assets and liabilities. Please note Cap...
A: A T-account is explained as,
Q: Prepaid Insurance of P 60,000 was overlooked at the end of 2021. What would be the adjusting entry i...
A: Prepaid expenses are expenses paid in advance.
Q: Net Income for 2019? Net Income for 2020? Net Income for 2021? Retained Earnings as of December 31, ...
A: Net income is transferred to retained earning account
Q: The notes receivable is debited by the bookkeeper instead of accounts receivable. What is the effect...
A: The assets have the debit balance and liabilities have the credit balance. Every transaction in the ...
Q: In October, November, and December, CVM Inc. expects to sell 50,000, 48,000, and 51,000 units, respe...
A: Desired ending inventory = following month's sales x 40% Budgeted production = Budgeted sales + Desi...
Q: Winslow Department S
A: Inventory turnover ratio = Cost of goods sold / Average inventory Inventory turnover ratio = $12,000...
Q: Total Manufacturing costs are also known as product costs. Which of the following best describes tho...
A: Direct material - It is the cost of raw material from which final product is made . Direct labour -...
Q: NW Flour Company buys 1 input of standard flour and refines it using a special siting process to 3 c...
A: In constant Gross Margin % the joint cost are allocated after subtracting the gross margin and separ...
Q: A company sclls two products, one with sales of $10,000 and variable another with sales of $46,000 a...
A: Solution Note Dear student as per the Q&A guideline we are required to answer the first question...
Q: E ratio on the date of the last Treasury Stock Transaction? Net Income after taxes = $353,018 Last...
A: Price earning ratio (P/E) ratio refers to the concept which evaluated the present market value of a ...
Q: Non-recording of purchases during the current and the non-inclusion of the goods purchased in ending...
A: Purchases refers to process of acquiring required materials or trading goods by an entity which crea...
Q: PSb 5-1 Determine the Applicable FUTA Tax Rate For each of the following businesses, determine the a...
A: The Federal Unemployment Tax Act (FUTA) is a piece of legislation that imposes a payroll tax on any ...
Q: Grand Company reported the following on its income statement: Income before income taxes$ ,000 Incom...
A: Lets understand the basics. Times interest earned ratio indicates the companies ability to pay inter...
Q: Why is an entity permitted by financial reporting standards to change an accounting policy? O The ch...
A: Solution Concept The change in accounting policy is allowed under two situation -the...
Q: TMI Systems, a company that customizes software for construction cost estimates, repaid a loan obta...
A: Amount Paid = Principal Amount + Simple Interest Simple Interest = (P * R * T)Where P = Principal ...
Q: What is the principal amount of the investment?
A: Investment refers to those mechanism which is used by the company for the purpose of generating inco...
Q: Sales of P 150,000 in 2021 were recorded as sales of 2022. What would be the adjusting entry if the ...
A: Prior period errors are errors occurred in previous period/s but detected in current period. Any pri...
Q: Sb 5-4 Calculate SUTA Tax r each of the following independent circumstances calculate the SUTA tax o...
A: Under the provisions of SUTA The maximum earnings subject to tax is $8500 Computation of taxable ear...
Q: Robertson Company had purchased an equipment on January 1, 2019 for P 4,800,000. The entity used the...
A: It is pertinent to note that a change in accounting estimate needs to be accounted for prospectively...
Q: UTA tax = $ employer in Durham, North Carolina, employs three individuals, whose taxable ea uring th...
A: Tax refers to the mandatory charge levied by the government over the income gained by an entity. ...
Q: Jessie Company purchased an investment property on January 1, 2020 at a cost of P2,200,000. The prop...
A: Given information, Cost of the property =P2,200,000 Fair value of the property =P3,000,000 Useful li...
Q: ANSWER THE FOLLOWING Complete the statement: closing entries ________ A. Reflect the net inco...
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any ...
Q: What is XYZ's current ratio on December 31, 2021? -What is XYZ's Accounts Receivables Turnover for ...
A: The ratio analysis helps to analyse the financial statements of the business. Current ratio = curren...
Q: During 2021, Colombo Company changed its inventory costing method from FIFO to weighted average meth...
A: Inventory is one of the important current asset of the business. Regular management and valuation of...
Q: On January 1, year 1, Bray Company purchased for P 240,000 a machine with a useful life of ten years...
A: Solution Concept When there is change in depreciation method and the change is justifiable , the car...
Q: Joint ventures are a common way of doing business nowadays. Explain what a joint venture is, and sta...
A: A joint venture is a short-term business venture in which two or more people work together and share...
Q: Which of the following statements regarding accounting change is correct? a. Change in depreciation...
A: Accounting changes means when there is some change in the process and methodologies related to accou...
Q: peg. on to view the additional information.) e Income and Part I Federal Tax Payable for the Sebago ...
A: Taxable income refers to the total sum of money earned by an entity that is subject to the mandatory...
Q: During your audit of the books of Colorado Corporation for the year er December 31, 2021, you discov...
A: Accrued income refers to income earned but not yet received. Example - Rent receivable Accrued expen...
Q: Frank works for 7 hours for 5 days a week. He is paid RO 6 an hour for regular time and time and a h...
A: Gross pay is an amount that is used to calculate the wages (hourly) and salary of an employee. It is...
Q: Which of the following is not a counterbalancing error? O Omission of accrued interest expense at ye...
A: Since you have asked multiple questions, we will solve the first question for you. If you want any s...
Q: Sports Socks has a policy of always paying within the discount period and each of its suppliers prov...
A: Solution: Balance in accounts payable for a month will be purchase unpaid during particular month an...
Q: If the statement of financial position error is discovered in a subsequent accounting period, what a...
A: The error in the financial statement could be cause due to any mathematical mistakes or other reason...
Q: I buy house on credit. The operation will Select one: O a. not change my total assets O b. decrease ...
A: The assets are the accounts which are owned by the business. The assets have debit balance. The lia...
Q: 2: Martin Hughes earns net self-employment income of $157,100. He works a second job from which he r...
A: Taxes are forced contributions imposed by a agency on individuals or corporations, whether municipal...
Q: Learning Task 1: Identify or classify the different account titles as to whether they belong to Asse...
A: Assets are divided into two Current assets and Noncurrent assets. Current assets are all the assets ...
Q: 've got a quick question for you: I was contacted by a recruiter to take a Director position at a co...
A: Taxes are forced contributions imposed by a agency on individuals or corporations, whether municipal...
Q: The Income Statement of Macjo Company shows operating expenses of 530,000. The following information...
A: An operational expense is a cost incurred by a company as a result of its routine business activitie...
Q: I. When Indirect Materials are requisitioned, the work in process account is debited II. One reason ...
A: Last option is correct that is both statements are true.
Q: What is the effect of omission of accrued income in retained earnings at the end of year 2? a. Unde...
A: A basic Accounting equation is given as under; Assets = Equity + Liabilities Meaning, Total As...
Q: On January 1 of the current y ear, the Jordan Morris Company purchased office machinery for $94,000....
A: The question is based on the the concept of Depreciation Accounting. Depreciation is the decrease in...
Q: tory, January 1, 2022, P 15,000; Credit - Cost of Sales, P 15,000. b. Debit - Retained Earnings, P 1...
A: The inventory balance of December 31 , 2021 is carried forward to January 1, 2022. If the ending inv...
Q: The payment of supplier's account is debited to accounts receivable. What is the effect of the error...
A: Ans. The error while passing journal entries leads to overstated or understate of profits.
Q: What are some of the pros and cons of the Ceres (non-profit organization) CSR reporting framework?
A: Ceres was one of the first organizations to introduce formally the concept of CSR reporting.
Q: COLORADO INC. is a chemical manufacturer that supplies various products to industrial users. The com...
A:
Q: A vendor can have default accounts for Expense and HST set up in the vendor Options window. a) True ...
A: A company must have all valid accounts related to the transactions so that all entries can be made e...
Q: At the fiscal year ended June 30, 2020, the following information is available for Shein Company: Co...
A: Let's understand the basics Net income is the also called net earnings, is sales minus cost of goods...
Q: st month of her operations. She sold one half of her CDs sbought at the beginning to satisfy her cus...
A: Gross Profit is profit earned on sale of goods. Its is calculated by deducting the cost of goods sol...
Step by step
Solved in 2 steps
- 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 9,800It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019 (which will be issued in March 2020). You read in the newspaper that Travis Corporation, a major customer of Davenport, is in financial difficulty. Included in Davenports accounts receivable is 50,000 (a material amount) owed to it by Travis. You approach Jim Davenport, president, with this information and suggest that a reduction of accounts receivable and recognition of a loss for 2019 might be appropriate. Jim replies, Why should we make an adjustment? Ted Travis, the president of Travis Corporation, is a friend of mine; he will find a way to pay us, one way or another. Furthermore, this occurred in 2020, so lets wait and see what happens; we can always make an adjustment later this year. Our 2019 income and year-end working capital are not that high; our creditors and shareholders wouldnt stand for lower amounts than they already are. Required: From financial reporting and ethical perspectives, prepare a response to Jim Davenport regarding this issue.Soon after December 31, 2019, the auditor requested a depreciation schedule for trucks of Jarrett Trucking Company, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period 2016 to 2019, inclusive. The following data were in the Trucks account as of January 1, 2016: The Accumulated DepreciationTrucks account, previously adjusted to January 1,2016, and duly entered in the ledger, had a balance on that date of 16,460. This amount represented the straight-line depreciation on the four trucks from the respective dates of purchase, based on a 5-year life and no residual value. No debits had been made to this account prior to January 1, 2016. Transactions between January 1,2017, and December 31, 2019, and their record in the ledger were as follows: 1. July 1, 2016: Truck no. 1 was sold for 1,000 cash. The entry was a debit to Cash and a credit to Trucks, 1,000. 2. January 1, 2017: Truck no. 3 was traded for a larger one (no. 5) with a 5-year life. The agreed purchase price was 12,000. Jarrett paid the other company 1,780 cash on the transaction. The entry was a debit to Trucks, 1,780, and a credit to Cash, 1,780. 3. July 1, 2018: Truck no. 4 was damaged in a wreck to such an extent that it was sold as junk for 50 cash. Jarrett received 950 from the insurance company. The entry made by the bookkeeper was a debit to Cash, 1,000, and credits to Miscellaneous Revenue, 50, and Trucks, 950, 4. July 1, 2018: A new truck (no. 6) was acquired for 20,000 cash and debited at that amount to the Trucks account. The truck has a 5-year life. Entries for depreciation had been made at the close of each year as follows: 2016, 8,840; 2017, 5,436; 2018, 4,896; 2019, 4,356. Required: 1. Next Level For each of the 4 years, calculate separately the increase or decrease in earnings arising from the companys errors in determining or entering depreciation or in recording transactions affecting trucks. 2. Prove your work by one compound journal entry as of December 31, 2019; the adjustment of the Trucks account is to reflect the correct balances, assuming that the books have not been closed for 2019.
- Abrat Company failed to accrue an allowance for doubtful accounts of 13,500 in 2019. Upon discovery of this error in 2020 prior to making its estimate of doubtful accounts, what correcting journal entry should Abrat make? Ignore income taxes.If Wakowski Companys ending inventory was actually $86,000 but was adjusted at year end to a balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?Suppose that an audit of Prime Sports Gear encountered the following two errors: a. Inventory totaling 4,500 should have been written off as worthless at the end of the year. Year-end inventory should be only 195,600. Net income is reduced to 117,110. b. Checks totaling 20,000 for some of the salaries payable at year-end had in fact been written and mailed out on December 31, 2013. Thus, both the cash account and the salaries payable account are overstated at year-end. Correct both errors on the worksheet. Save your completed file as CASHFLOW4. Print the worksheet when done. What impact did each of these adjustments have on cash flow for 2013?
- Gross Profit Shelly Corporation is an importer and wholesaler. Its merchandise is purchased from several suppliers and is warehoused by Shelly until sold to consumers. In conducting her audit for the year ended June 30, 2019, the corporations CPA determined that the system of internal control was good. Accordingly, she observed the physical inventory at an interim date, May 31, 2019, instead of at year-end. The CPA obtained the following information from the general ledger: The CPAs audit disclosed the following information: Required: In audit engagements in which interim physical inventories are observed, a frequently used auditing procedure is to test the reasonableness of the year-end inventory by the application of gross profit ratios. Prepare in good form the following schedules: 1. Computation of the gross profit ratio for 11 months ended May 31, 2019 2. Computation by the gross profit ratio method of cost of goods sold during June 2019 3. Computation by the gross profit ratio method of June 30, 2019 inventoryThe balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before any necessary year-end adjustment relating to the following: Goods were in transit from a vendor to Ashwood on December 31, 2019. The invoice cost was 85,000, and the goods were shipped FOB shipping point on December 29, 2019. The goods were received on January 2, 2020. Goods shipped FOB shipping point on December 20, 2019, from a vendor to Ashwood were lost in transit. The invoice cost was 40,000. On January 5, 2020, Ashwood filed a 40,000 claim against the common carrier. Goods shipped FOB destination on December 22, 2019, from a vendor to Ashwood were received on January 6, 2020. The invoice cost was 20,000, What amount should Ashwood report as accounts payable on its December 31,2019, balance sheet? a. 1,260,000 b. 1,285,000 c. 1,325,000 d. 1,345,000At the end of 2019, Manny Company recorded its ending inventory at 350,000 based on a physical count. During 2020, the company discovered that the correct inventory value at the end of 2019 should have been 400,000 because it made a counting error. Upon discovery of this error in 2020, what correcting journal entry will Manny make? Ignore income taxes.
- Upon inspection of the records of Eisenhower Company in connection to its financial statement audit for the year ended December 31, 2022, the following errors were revealed: A fire insurance premium of P 40,000 was paid and charged to insurance expense in 2021. This covers one year from April 1, 2021. Inventory at December 31, 2020 was understated by P 80,000. Inventory at December 31, 2021 was understated by P 120,000. The year 2021 last quarter taxes amounting to P 60,000 were paid on January 19, 2022 and charged to expense account of 2022. A cash advance of P 100,000 in payment of goods to be delivered in January 2022 was received on December 15, 2021 and credited to Sales. The gross profit on sales is 40%. The net income for the year ended December 31, 2021 before any adjustments is P 1,550,000. Group of answer choices 1,600,000 1,200,000 1,440,000 1,550,000Upon inspection of the records of Eisenhower Company in connection to its financial statement audit for the year ended December 31, 2022, the following errors were revealed: • A fire insurance premium of P 40,000 was paid and charged to insurance expense in 2021. This covers one year from April 1, 2021. • Inventory at December 31, 2020 was understated by P 80,000. • Inventory at December 31, 2021 was understated by P 120,000. • The year 2021 last quarter taxes amounting to P 60,000 were paid on January 19, 2022 and charged to expense account of 2022. • A cash advance of P 100,000 in payment of goods to be delivered in January 2022 was received on December 15, 2021 and credited to Sales. • The gross profit on sales is 40%. • The net income for the year ended December 31, 2021 before any adjustments is P 1,550.000. 1,200,000 1,440,000 1,550,000 1,600,000During your audit of the books of Antigua Corporation for the year ended December 31, 2021, you discovered the following errors during the years 2019, 2020 and 2021. Errors 2019 2020 2021 Understatement of ending inventory 25,000 30,000 Overstatement of ending inventory 16,000 Omission of the following: Prepaid insurance 7,500 10,000 Unearned rent income 8,000 Accrued salaries expense 12,000 10,000 Accrued interest revenue 2,000 3,000 Erroneous capitalization of machinery repairs 15,000 Overstatement of machinery depreciation 1,500 1,500 Erroneous charging to expense of equipment cost 25,000 Understatement of equipment depreciation 2,500 2,500 2,500 Net income for the year 1,500,000 2,000,000 2,250,000 Retained earnings at year-end 7,500,000 8,750,000 9,250,000 Machinery has an estimated useful life of 10 years while equipment is 5 years. REQUIRED: Compute the corrected balances of the…