When the records of Debra Hanson Corporation were reviewed at the close of 2021, the following errors were discovered. For each item, indicate by a check mark in the appropriate column whether the error resulted in an overstatement, an understatement, or had no effect on net income for the years 2020 and 2021. 2020 2021 Item Over-statement Under-statement No Effect Over-statement Under-statement No Effect 1. Failure to record amortization of patent in 2021. 2. Failure to record the correct amount of ending 2020 inventory. The amount was understated because of an error in calculation. 3. Failure to record merchandise purchased in 2020. Merchandise was also omitted from ending inventory in 2020 but was not yet sold. 4. Failure to record accrued interest on notes payable in 2020; that amount was recorded when paid in 2021. 5. Failure to reflect supplies on hand on balance sheet at end of 2020.
When the records of Debra Hanson Corporation were reviewed at the close of 2021, the following errors were discovered. For each item, indicate by a check mark in the appropriate column whether the error resulted in an overstatement, an understatement, or had no effect on net income for the years 2020 and 2021. 2020 2021 Item Over-statement Under-statement No Effect Over-statement Under-statement No Effect 1. Failure to record amortization of patent in 2021. 2. Failure to record the correct amount of ending 2020 inventory. The amount was understated because of an error in calculation. 3. Failure to record merchandise purchased in 2020. Merchandise was also omitted from ending inventory in 2020 but was not yet sold. 4. Failure to record accrued interest on notes payable in 2020; that amount was recorded when paid in 2021. 5. Failure to reflect supplies on hand on balance sheet at end of 2020.
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
Chapter12: Intangibles
Section: Chapter Questions
Problem 1C: In examining Samson Manufacturing Companys books, you find on the December 31, 2019, balance sheet...
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Question
When the records of Debra Hanson Corporation were reviewed at the close of 2021, the following errors were discovered. For each item, indicate by a check mark in the appropriate column whether the error resulted in an overstatement, an understatement, or had no effect on net income for the years 2020 and 2021.
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2020
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2021
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Item
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Over-statement
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Under-statement
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No Effect
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Over-statement
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Under-statement
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No Effect
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1. Failure to record amortization
of patent in 2021. |
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2. Failure to record the correct
amount of ending 2020 inventory. The amount was understated because of an error in calculation. |
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3. Failure to record merchandise |
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4. Failure to record accrued
interest on notes payable in 2020; that amount was recorded when paid in 2021. |
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5. Failure to reflect supplies on
hand on balance sheet at end of 2020. |
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