During the taking of its physical inventory on December 31, 2019, Waterjet Bath Company incorrectly counted its inventory as $728,660 instead of the correct amount of $719,880. Indicate the effect of the misstatement on Waterjet Bath’s December 31, 2019, balance sheet and income statement for the year ended December 31, 2019.
Q: Goddard Company has used the FIFO method of inventory valustion since it began operations in 2018.…
A: Introduction: A journal entry is a form of accounting entry where the transactions are being…
Q: Sayaovang Company discovers in 2020 that its ending inventory at December 31, 2019, was $7,000…
A: Introduction: Income statement: All revenues and expenses are recorded in income statement. It tells…
Q: Berkshire Inc. uses a periodic inventory system. At the end of 2020, it missed counting some…
A: Periodic inventory system is an inventory system under which all purchase and sale of inventories…
Q: Martinez Co. decides at the beginning of 2020 to adopt the FIFO method of inventory valuation.…
A: The income statement is prepared to find the net income or losses incurred during the period.
Q: At 31 December 2019, Alpha Ltd still had the same three different products in its inventory. The…
A:
Q: During the course of an audit of the financial statements of Julie Company for the yearended…
A: Net income refers to the revenue a company earns less cost of goods sold, selling and administration…
Q: Theta Inc. counted and reported the ending inventory on December 31, 2019 at P 2,000,000. None of…
A: Here in this question, we are required to calculate correct amount of inventory for the December…
Q: Items to Be Included in Inventory As the auditor of Hayes Company for the year ended December 31,…
A: Explain whether Company H should include the merchandise in its inventory for each situation.…
Q: Sarasota Company began operations on January 1, 2019, adopting the conventional retail inventory…
A: Conventional Retail Method: The conventional retail inventory approach is based on the link between…
Q: pany discovered a computational error of P150,000 in the calculation of the December 31, 2021…
A: Retained earnings refers to the amount which company remained from profit after paying all the…
Q: The balance in Vloom Company's inventory account on December 31, 2019 was P1,225,000 before the…
A: Under the terms of the FOB shipping point, the buyer becomes the owner of the goods as soon the…
Q: Cooper Inc. took physical inventory count at the end of 2020. On the day of physical count, there…
A: Generally there are two terms of Shipping: FOB SHIPPING FOB DESTINATION Under FOB SHIPPING,…
Q: What is the correct amount of inventory on December 31, 2021? Emperador Company counted and reported…
A: Inventory is one of the important current asset being held by the business. It includes raw…
Q: During 2021, WMC Corporation discovered that its ending inventories reported in its financial…
A: Journal entry shows the recording of transactions during an accounting year and every transaction…
Q: As a result of a thorough physical inventory, TANK Company determined that it had inventory worth…
A: Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to…
Q: Keller Company began operations on January 1, 2019, adopting the conventional retail inventory…
A: A ) Cost of ending inventory under conventional retail method: Cost of Ending inventory by using…
Q: Cullumber Corporation had the following items in inventory as at December 31, 2020: Item No.…
A: LCNRV refers to the method where the carrying value of the inventory is determined by comparing the…
Q: Shondee Corporation uses the lower of cost or market and FIFO inventory methods. At the end of 2019,…
A: Income per year = (Value under FIFO Method - Value Under Cost Method) / No.of year
Q: During the taking of its physical inventory on August 31, 2019, Kate Interiors Company incorrectly…
A: Inventory error:Inventory errors are sometimes caused by making mistake, in physical count, in…
Q: Wildhorse Company began operations on January 1, 2019, adopting the conventional retail inventory…
A: Inventory is the stock of goods purchased by a company for reselling purposes or for manufacturing…
Q: BETA Company began operations in January 2021. Financial statements for the years ended December 31,…
A: Effects of 2021 errors on 2022 Ending Inventory 16000-Understated +16000…
Q: John Olerud Ltd., a local retailing concern in the Bronx, New York, has decided to change from the…
A:
Q: An entry to record Purchases and related Accounts Payable of \130,000 for merchandise purchased…
A: Solution: Non recording purchases results in Understatement of purchases and understatement of cost…
Q: Tommy City acquired $17300 of supplies inventory on November 1, 2019, having held no supplies…
A: The inventory is recorded as a perpetual inventory system and periodical inventory system. As per…
Q: In 2021, the internal auditors of Development Technologies, Inc., discovered that a $5.6 million…
A: Given that, During the audit of 2021, $5.6 Million purchase of merchandise in 2021 was recorded in…
Q: You have been hired as the new controller for the Ralston Company. Shortly after joining the company…
A: Journal: Recording of a business transactions in a chronological order.
Q: m Company has following information related to its financial statements in 2021: (1) Tim…
A: Step 1 Journal is the Part of Book Keeping.
Q: The following errors were discovered in the preparation of the financial statements of Uni-Focus…
A: The correction entries are passed to correct the information in the books.
Q: BETA Company began operations in January 2021. Financial statements for the years ended December 31,…
A: Retained earnings refer to the amount of profit which is retained by the business entity after the…
Q: Martinez Co. decides at the beginning of 2020 to adopt the FIFO method of inventory valuation.…
A: An accounting change from LIFO to FIFO requires retrospective accounting (i.e.) changes have to be…
Q: As a result of its annual inventory count, Bridgeport Corp. determined its ending inventory at cost…
A: Inventory can be referred to as the assets which are held by an entity for the purpose of re sale or…
Q: At December 31, 2020, Sandhill’s Mercantile has Cost of Goods Sold of $50800 before adjusting…
A: Adjusted cost of goods sold = Reported cost of goods sold + decreased value of inventory
Q: After the issuance of the 2021 financial statements, Pine Company discovered a computational error…
A: Due to error, there is overstatement of COGS, this has resulted in less profit reporting. In order…
Q: At the start of August 2022, OLIVIA Company had no beginning inventories. In addition, the following…
A:
Q: An entity reported the following events during 2020: It was decided to write-off P800,000 of…
A: Prior period errors are errors that are made in previous period while preparing and reporting…
Q: On January 13, 2021, BlossomCorporation discovered that goods in transit from a supplier of $114,150…
A: Introduction:- Journal entry is the first stage of accounting process. Journal entry used to record…
Q: You took a physical inventory for your sole proprietorship at the close of business on July 31,…
A: As on 31.07.2019, Closing inventory = P205000 Opening inventory = ? During July month, Sales =…
Q: In 2021, the controller of Sytec Corporation discovered that $42,000 of inventory purchases were…
A: 1. Determine the effects of the errors on retained earnings at January 1, 2021. In the year 2020,…
Q: Determine the cost of the 2020 ending inventory under both (a) the conventional retail method and…
A: The conventional retail method utilizes an independent business account as stock instead of items at…
Q: Sandhill Electronics uses a perpetual inventory system which, at the company’s year-end December 31,…
A: In this numerical has covered the concept of Inventory Valuation.
Q: During 2021, WMC Corporation discovered that its ending inventories reported on its financial…
A: 1. The effects of inventory error of understated ending inventory of $120,000 in 2019. In the year…
Q: At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2…
A: 1. Compute the correct Net Income for the years 2018 and 2019, after the errors are corrected.
Q: Cullumber Corporation had the following items in inventory as at December 31, 2020: Item No.…
A: The lower of cost and market value needs to be computed for each item of the inventry
Q: Cullumber Corporation had the following items in inventory as at December 31, 2020: Item No.…
A: Under periodic inventory system, updates to the inventory records are made on a periodic basis.…
Q: Will Company began operations late in 2019 and adopted the conventional retail inventory method.…
A: (a) Conventional retail method.First, calculate estimated inventory at retail.
Q: Goddard Company has used the FIFO method of inventory valuation since it began operations in 2018.…
A: Lets understand the basics. When there is change in closing stock valuation policy from onw method…
Q: Taveras Co. decides at the beginning of 2020 to adopt the FIFO method of inventory valuation.…
A:
Q: As a result of a thorough physical inventory, Ulalam Company determined that it had inventory worth…
A: Solution:- Calculation of the correct amount of inventory to be reported in Ulalam Company’s…
Q: You have been assigned to examine the financial statements of PC corp. for the year ended December…
A: Journal entry: The journal entry refers to the records of all business transactions and events in a…
During the taking of its physical inventory on December 31, 2019, Waterjet Bath Company incorrectly counted its inventory as $728,660 instead of the correct amount of $719,880. Indicate the effect of the misstatement on Waterjet Bath’s December 31, 2019,
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- At 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.Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the allowance method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the direct method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
- Koopman Company began operations on January 1, 2018, and uses they FIFO inventory method for financial reporting and the average cost inventory method for income taxes. At the beginning of 2020, Koopman decided to switch to the average cost inventory method for financial reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the FIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Koopman is subject to a 21% income tax rate in all years; it pays the income taxes payable of a current year in the first quarter of the next year. Koopman had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Koopman had cash of 10,000, inventory of 24,000, other assets of 70,800, accounts payable of 4,500, and income taxes payable of 6,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in methods at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.The following items were included in Venicio Corporations inventory account on December 31, 2019: What amount should Venicio report as inventory at December 31, 2019? a. 21,000 b. 20,400 c. 26,000 d. 35,000Schmidt Company began operations on January 1, 2018, and used the LIFO inventory method for both financial reporting and income taxes. However, at the beginning of 2020, Schmidt decided to switch to the average cost inventory method for financial and income tax reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the LIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Schmidt is subject to a 21% income tax rate in all years; it pays all income taxes payable in the next quarter. Assume that any deferred tax liability was paid in the subsequent year. Schmidt had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Schmidt had cash of 15,600, inventory of 34,000, other assets of 76,000, income taxes payable of 4,200, and accounts payable of 3,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in method at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.
- Borys Companys periodic inventory at December 31, 2019, is understated by 10,000, but purchases are correct. Johnson correctly values its 2020 ending inventory. What is the effect of this error on Boryss 2019 and 2020 financial statements?Grimstad Company uses FIFO for internal reporting purposes and LIFO for financial reporting and income tax purposes. At the end of 2019, the following information was obtained from the inventory records: Required: 1. Prepare the necessary adjusting journal entry assuming that Grimstad converts the accounts to LIFO at the end of 2019. 2. Indicate how Grimstad would disclose the inventory value on its comparative balance sheets prepared at the end of 2019. 3. Next Level By how much would Grimstads cost of goods sold differ in 2019 if it used FIFO for external reporting?Effects of an Error in Ending Inventory Waymire Company prepared the partial income statements presented below for 2019 and 2018. During 2020, Waymires accountant discovered that ending inventory for 2018 had been understated by $6,500. Required: 1. Prepare corrected income statements for 2019 and 2018. 2. Prepare a schedule showing each financial statement item affected by the error and the amount of the error for that item (ignore the effect of income taxes). Indicate whether each error is an overstatement (+) or an understatement (-).
- Company Elmira reported the following cost of goods sold but later realized that an error had been made in ending inventory for year 2021. The correct inventory amount for 2021 was 32,000. Once the error is corrected, (a) how much is the restated cost of goods sold for 2021? and (b) how much is the restated cost of goods sold for 2022?On December 31, 2019, the balances of the accounts appearing in the ledger of Wyman Company are as follows: Instructions 1. Does Wyman Company use a periodic or perpetual inventory system? Explain. 2. Prepare a multiple-step income statement for Wyman Company for the year ended December 31, 2019. The merchandise inventory as of December 31, 2019, was 305,000. The adjustment for estimated returns inventory for sales for the year ending December 31, 2019, was 30,000. 3. Prepare the closing entries for Wyman Company as of December 31, 2019. 4. What would the net income have been if the perpetual inventory system had been used?On June 30, 2019, the balances of the accounts appearing in the ledger of Simkins Company are as follows: Instructions 1. Does Simkins Company use a periodic or perpetual inventory system? Explain. 2. Prepare a multiple-step income statement for Simkins Company for the year ended June 30, 2019. The merchandise inventory as of June 30, 2019, was 508,000. The adjustment for estimated returns inventory for sales for the year ending December 31, 2019, was 33,000. 3. Prepare the closing entries for Simkins Company as of June 30, 2019. 4. What would the net income have been if the perpetual inventory system had been used?