Effects of errors on financial statements For a recent year, the balance sheet for The Campbell Soup Company (CPB) includes accrued expenses of $604 million. The income before taxes for Campbell for the year was $849 million. a. Assume the adjusting entry for $604 million of accrued expenses was not recorded at the end of the year. By how much would income before taxes have been misstated? b. What is the percentage of the misstatement in (a) to the reported income of $849 million? Round to one decimal place.

BuyFind

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
BuyFind

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

Solutions

Chapter 3, Problem 22E
Textbook Problem

Effects of errors on financial statements

For a recent year, the balance sheet for The Campbell Soup Company (CPB) includes accrued expenses of $604 million. The income before taxes for Campbell for the year was $849 million.

a. Assume the adjusting entry for $604 million of accrued expenses was not recorded at the end of the year. By how much would income before taxes have been misstated?

b. What is the percentage of the misstatement in (a) to the reported income of $849 million? Round to one decimal place.

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Chapter 3 Solutions

Financial And Managerial Accounting
Ch. 3 - Accounts requiring adjustment Indicate with a Yes...Ch. 3 - Type of adjustment Classify the following items as...Ch. 3 - Adjustment for accrued revenues At the end of the...Ch. 3 - Adjustment for accrued expense Prospect Realty Co....Ch. 3 - Adjustment for unearned revenue On June 1, 20Y2,...Ch. 3 - Adjustment for prepaid expense The prepaid...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Effect of omitting adjustments For the year ending...Ch. 3 - Effect of errors on adjusted trial balance For...Ch. 3 - Vertical analysis Two income statements for Cornea...Ch. 3 - Classifying types of adjustments Classify the...Ch. 3 - Classifying adjusting entries The following...Ch. 3 - Adjusting entry for accrued fees At the end of the...Ch. 3 - Effect of omitting adjusting entry Paradise Realty...Ch. 3 - Adjusting entries for accrued salaries Paradise...Ch. 3 - Determining wages paid The wages payable and wages...Ch. 3 - Effect of omitting adjusting entry Accrued...Ch. 3 - Effect of omitting adjusting entry When preparing...Ch. 3 - Adjusting entries for unearned fees The balance in...Ch. 3 - Effect of omitting adjusting entry At the end of...Ch. 3 - Adjusting entry for supplies The balance in the...Ch. 3 - Determining supplies purchased The supplies and...Ch. 3 - Effect of omitting adjusting entry At March 31,...Ch. 3 - Adjusting entries for prepaid insurance The...Ch. 3 - Adjusting entries for prepaid insurance The...Ch. 3 - Adjusting entries for unearned and accrued fees...Ch. 3 - Adjusting entries for prepaid and accrued taxes...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Determining fixed assets book value The balance in...Ch. 3 - Book value of fixed assets In a recent balance...Ch. 3 - Effects of errors on financial statements For a...Ch. 3 - Effects of errors on financial statements For a...Ch. 3 - Effects of errors on financial statements The...Ch. 3 - Effects of errors on financial statements If the...Ch. 3 - Adjusting entries for depreciation; effect of...Ch. 3 - Adjusting entries from trial balances The...Ch. 3 - Adjusting entries from trial balances The...Ch. 3 - Adjusting entries On March 31, the following data...Ch. 3 - Adjusting entries Selected account balances before...Ch. 3 - Adjusting entries Trident Repairs Service, an...Ch. 3 - Adjusting entries Good Note Company specializes in...Ch. 3 - Adjusting entries and adjusted trial balances...Ch. 3 - Adjusting entries and errors At the end of April,...Ch. 3 - Adjusting entries On May 31, the following data...Ch. 3 - Adjusting entries Selected account balances before...Ch. 3 - Adjusting entries Crazy Mountain Outfitters Co.,...Ch. 3 - Adjusting entries The Signage Company specializes...Ch. 3 - Adjusting entries and adjusted trial balances...Ch. 3 - Adjusting entries and errors At the end of August,...Ch. 3 - The unadjusted trial balance that you prepared for...Ch. 3 - Analyze Amazon.com Amazon.com, Inc. (AMZN) is the...Ch. 3 - Analyze Pandora Media Pandora Media, Inc. (P)...Ch. 3 - Analyze World Wrestling Entertainment World...Ch. 3 - Analyze Chipotle Mexican Grill Chipotle Mexican...Ch. 3 - Analyze Nike The following data are taken from...Ch. 3 - Analyze and Compare ATT and Verizon Communications...Ch. 3 - Ethics in Action Chris P. Bacon is the chief...Ch. 3 - Loan application Daryl Kirby opened Squid Realty...Ch. 3 - Communication Delta Air Lines is a major passenger...Ch. 3 - Adjustments and financial statements Several years...

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