You were engaged by CPA Co. to audit its financial statements for the first time. In ex: you found out that certain adjustments had been overlooked at the end of 2019 and 20 discovered that other items had been improperly recorded. These omissions and othe year are summarized below: 12/31/2020 12/3 P780,000 Salaries payable Interest receivable Prepaid insurance Advances from customers (collections from customers had been recorded as sales but should have been recognized as advances from customers because goods were not 213,000 307,800

You were engaged by CPA Co. to audit its financial statements for the first time. In ex: you found out that certain adjustments had been overlooked at the end of 2019 and 20 discovered that other items had been improperly recorded. These omissions and othe year are summarized below: 12/31/2020 12/3 P780,000 Salaries payable Interest receivable Prepaid insurance Advances from customers (collections from customers had been recorded as sales but should have been recognized as advances from customers because goods were not 213,000 307,800

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

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 6C

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Correction of errorsIn examining the books of Mulan Company, you found out that certain adjustments had been overlooked at the end of 2019 and 2020. You also discovered that other items had been improperly recorded. These omissions and other failures for each year are summarized below: 12/31/20 12/31/19Salaries payable P780,000 P873,600Interest receivable 213,000 259,200Prepaid insurance 307,800 384,000Advances from customers (Collections from customers had beenrecorded as sales but should have been recognized as advances from customers because goods were not shipped until the following year) 561,000 470,400 Machinery (Capital expenditures had been recorded as repairs but shouldhave been charged to Machinery; the depreciation rate is 10% per year, but depreciation in the year of expenditure is to be recognized at 5%) 522,000 564,000 Required:Compute for the total effect of errors in the net income of 2019 and 2020.
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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 1,550,000
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9999...last recheck You have completed the field work in connection with your audit of Carla Corporation for the year ended December 31, 2020. The balance sheet accounts at the beginning and end of the year are shown below. Dec. 31,2020 Dec. 31,2019 Increase or(Decrease) Cash $311,248 $333,760 ($22,512 ) Accounts receivable 525,755 395,360 130,395 Inventory 830,704 683,200 147,504 Prepaid expenses 13,440 8,960 4,480 Investment in subsidiary 123,760 0 123,760 Cash surrender value of life insurance 2,580 2,016 564 Machinery 231,840 212,800 19,040 Buildings 599,424 456,848 142,576 Land 58,800 58,800 0 Patents 77,280 71,680 5,600 Copyrights 44,800 56,000 (11,200 ) Bond discount and issue cost 5,042 0 5,042 $2,824,673 $2,279,424 $545,249…
(5) Prepare the audit adjustment at December 31, 2021 to correct the amount of machinery, long-term liabilities, and other related accounts
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You were assigned to audit the financial statements of Swansea Corporation as at and for the year ended December 31, 2021. Your senior asked you to draft a memo on materiality and tolerable error for your client. Swansea Corporation has incurred substantial net losses due to COVID-19 pandemic. Up to 2019, it has been profitable. Which of the following is least likely to be your starting point in computing materiality? Group of answer choices Normalized net income Net loss Total assets Normalized revenue
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How much is the Doubtful accounts expense for 2019? A. 47,000 B. 62,000 C. 63,500 D. 65,000 What is the net amount of Accounts Receivables to be presented in the audited financial statements? A. 873,000 B. 886,500 C. 900,000 D. 1,000,000
9-The financial statements of company are closed on 31st December, 2020. The auditor completed documentation of final audit file before 15th January, 2021 in electronic form. He submitted the audit report on 31st January, 2021. Immediately after submission of audit report he deleted the audit file from his computer system. Is the deletion of final audit file valid? a. It is up to the discretion of auditor b. None of the options c. No, it is not valid as per the requirement of ISA d. Yes, it is valid as per the requirement of ISA
HI6026 AUDIT, ASSURANCE AND COMPLIANCE Question 6 Kangaroo Bedding Ltd is a bedding manufacturer that achieved a net profit before income tax of $1 842 000 for the year ended 30 June 2019. Kangaroo Bedding Ltd has a major loan from Westpac Bank (WB) for financing daily and other operations, carrying an interest rate of 7 per cent per annum. Kangaroo Bedding Ltd is required to adhere to financial covenants imposed by WB, and in the event that the covenants are breached, the annual interest rate on loan will increase to 10 per cent. Kangaroo Bedding Ltd has disclosed these details in the notes to the financial report. You are satisfied that the note in the financial report complies fully with the accounting standards; however, you form the view that your audit report should draw attention to this note. In addition, you have identified the following matters from your audit work: Kangaroo Bedding Ltd’s inventory amounted to $1 941 000 on 30 June 2019. In order to move some of its old…