CONNECT F/ INTERMEDIATE ACCTING>I<
10th Edition
ISBN: 9781260951585
Author: SPICELAND
Publisher: MCG
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At the end of 2019, Framber Company received $8000 as a prepayment for renting a building to a tenant during 2020. The company erroneously recorded the transaction by debiting Cash and crediting Rent Revenue in 2019 instead of 2020. Upon discovery of this error in 2020, what correcting journal entry will Framber make? Ignore income taxes.
Determine the net increase/decrease in net income for 2021 and Prepare a compound adjusting journal entry to reflect the correct net income for 2021, assuming that the books of 2021 are still open (do not use “income summary” as an account title)
Benderson, Inc. makes adjusting journal entries (AJEs) at the end of every month when they prepare their financial statements. Their accountant forgot to record the AJE to accrue utility expense for July 2019 on the July 31, 2019 financial statements. As a result of the omission:
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- At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2 years: Reported net income was 27,000 in 2018 and 35,000 in 2019. The allowance for doubtful accounts had a zero balance at the beginning of 2018. No accounts were written off during 2018 or 2019. Ignore income taxes. Required: 1. What is the correct net income for 2018 and 2019? 2. Prepare the adjusting journal entry in 2020 to correct the errors.arrow_forwardBy how much would the December 31, 2021 retained earnings be misstated if no adjustments were made for the above errors? Compute for the adjusted net income for the year 2021. *arrow_forwardRidley Corporation is in the process of adjusting and correcting its books at the end of 2020. In reviewing its records, the following information was discovered. Prepare the journal entries necessary at December 31, 2020, to record the corrections and changes. The books are still open for 2020. The income tax rate is 40%. The company has not yet recorded its 2020 income tax expense and payable amounts so current-year tax effects may be ignored. Prior-year tax effects must be considered in item 4.1. The company did not accrue sales commissions payable at the end of each of the last 2 years, as follows. December 31, 2019 $19,000December 31, 2020 $11,0002. In reviewing the December 31, 2020, inventory, Ridley discovered errors in its inventory taking procedures that have caused inventories for the last 3 years to be incorrect, as follows.December 31, 2018 Understated $16,000December 31, 2019 Understated $19,000December 31, 2020 Overstated $ 6,700The company has already made an entry that…arrow_forward
- . If Avonette fails to make an adjusting entry for the accrued interest on December 31,2018,a. net income will be understated and liabilities will be overstated.b. net income will be understated and assets will be understated.c. net income will be overstated and assets will be overstated.d. net income will be overstated and liabilities will be understated.arrow_forwardUse the following information to provide the adjusting journal entry that Chipotle should have made on December 31, 2020which was the end of the fiscal year 2020. Assume that Chipotle makes adjusting entries once a year at fiscal year end. At the end of fiscal year 2020, Chipotle owed employees $203 million related to work completed (but not yet paid) during fiscal year 2020. What adjusting journal entry should Chipotle make on December 31, 2020 related to these wages owed to employees? Account Title Debit Credit Salary expense 203 Salary payable 203 At the end of fiscal year 2020, Chipotle calculates that it has $105 million in sales on account that have not yet been received or recorded. What adjusting journal entry should Chipotle make on December 31, 2020 related to the sales on account? Account Title Debit Credit Accounts receivable 105 Sales revenue 105 Chipotle receives a utility bill every four weeks…arrow_forwardPrepare adjusting entries to record the depreciation expenses and estimated bad debts on 31 Jan. 2021arrow_forward
- If the errors were discovered in January 2018, what must be the entry to adjust 2017 Net Income/Retained Earnings assuming the books in 2017 are already closed?arrow_forwardMarvin’s Tax Service had earned—but not yet recorded—the following client service revenue atthe end of the current accounting period: Billable HourlyAccount Number Hours Billing RateAccount #4067 10 $85Account #3940 14 $75Account #1852 16 $90 Prepare the necessary adjusting entry to record Marvin’s unbilled client service revenuearrow_forwardPrepare the adjusting entry at march 31,2018, to record bad debts expenses.arrow_forward
- In December of 2019, a company received consulting services of $100,000. No entry was recorded for these service in 2019. The invoice for the services was received in January 2020 and recorded by debiting consulting expense and crediting accounts payable. This error was discovered in 2020 and was determined to be a material error. What is the impact of the error on the net income of 2019 and 2020? Provide the proper correcting journal enntry assuming a 30% tax rate.arrow_forward1. What amount should be reported as allowance for doubtful accounts on December 31, 2019? 2. What amount should be reported as doubtful accounts expense for the current year? Please show solutions along with the answers. Thank you!arrow_forwardTake the errors and omissions into account and reconcile the list of debtors to the adjusted balance of the Debtors’ Control account for the period ended 31 August 2021.arrow_forward
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