In fiscal year 2020, the company had formed an inventory impairment of 2000. In fiscal year 2021, the company considered that the required amount of accumulated impairment amounted to 1200 and thus reversed the difference in results. However, according to the documented opinion of the Chartered Accountant, the required amount of accumulated impairment in the year 2021 amounted to the amount of 2500. Based on the above if the amount of 2021 net worth is 15000, the actual net worth amount is 31/12/2021?
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In fiscal year 2020, the company had formed an inventory impairment of 2000. In fiscal year 2021, the company considered that the required amount of accumulated impairment amounted to 1200 and thus reversed the difference in results. However, according to the documented opinion of the Chartered Accountant, the required amount of accumulated impairment in the year 2021 amounted to the amount of 2500. Based on the above if the amount of 2021 net worth is 15000, the actual net worth amount is 31/12/2021?
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- After the issuance of the 2021 financial statements, Pine Company discovered a computational error of P150,000 in the calculation of the December 31, 2021 inventory. The error resulted in a P150,000 overstatement in the cost of goods sold for the year ended December 31, 2021. In October 2022, the entity paid the amount of P500,000 in settlement of litigation instituted against it during 2021. No provision for this possible loss was made in 2021. The income tax rate is 30%. What adjustment is required to restate retained earnings on January 1, 2021?When the records of ABC Corporation were reviewed at the close of 2021, the following errors were discovered. For each item, indicate by placing an X in the appropriate column(s) on the answer sheet whether the error resulted in an overstatement, an understatement, or had no effect on net income for the years 2020 and 2021. Item Failure to record amortization of patent in 2021. Failure to record the correct amount of ending 2020 inventory. The amount was understated because of an error in calculation. Failure to record merchandise purchased in 2020. Merchandise was also omitted from ending inventory in 2020 but was not yet sold. Failure to record accrued interest on notes payable in 2020; that amount was recorded when paid in 2021. Failure to reflect supplies on hand on balance sheet at end of 2020.Blossom Inc. is a calendar-year corporation. Its financial statements for the years 2022 and 2021 contained errors as follows: 2022 2021 Ending Inventory $9100 overstated $18100 overstated Depreciation Expense $6100 understated $13600 overstated O $7600 overstated O $15200 overstated O $10600 overstated O $3000 understated Assume that the proper correcting entries were made at December 31, 2021. By how much will 2022 income before taxes be overstated or understated?
- Sheffield, Inc. is a calendar-year corporation. Its financial statements for the years 2026 and 2025 contained errors as follows: Ending inventory Depreciation expense 2026 $15850 overstated $ 6500 overstated $3450 overstated $3450 understated. $9650 overstated $6200 understated 2025 $25000 overstated $18500 overstated Assume that the proper correcting entries were made at December 31, 2025. By how much will 2026 income before taxes be overstated or understated? Sheffield, Inc. is a calendar-year corporation. Its financial statements for the years 2026 and 2025 contained errors as follows: Ending inventory Depreciation expense 2026 $15850 overstated $6500 overstated $3450 overstated $3450 understated $9650 overstated $6200 understated 2025 $25000 overstated $18500 overstated Assume that the proper correcting entries were made at December 31, 2025, By how much will 2026 income before taxes be overstated or understated?Bonita, Inc. is a calendar-year corporation. Its financial statements for the years 2021 and 2020 contained errors as follows: Ending inventory Depreciation expense O $6000 overstated O $15750 understated O O $6000 understated 2021 $0 $10200 overstated $5550 understated 2020 Assume that no correcting entries were made at December 31, 2020, or December 31, 2021 and that no additional errors occurred in 2022. Ignoring income taxes, by how much will working capital at December 31, 2022 be overstated or understated? $23500 overstated $17500 overstated(S) porins) An audit of Antwren revealed four errors that were made but never corrected. In 2021, ending inventory was overstated by $201, 000 and depreciation was overstated by $44,000. In 2022, nding inventory was understated by $111, 000 and wages expens as understated by $86, 000. What effect did these errors have 0 htwren's 2022 net income? (RE&CF 6) understated by $226, 000 overstated by $132, 000 pverstated by $157,000 inderstated by $25,000
- The before-tax income for Lonnie Holdiman Co. for 2020 was $101,000 and $77,400 for 2021. However, the accountant noted that the following errors had been made: 1. Sales for 2020 included amounts of $38,200 which had been received in cash during 2020, but for which the related products were delivered in 2021. Title did not pass to the purchaser until 2021. 2. The inventory on December 31, 2020, was understated by $8,640. 3. The bookkeeper in recording interest expense for both 2020 and 2021 on bonds payable made the following entry on an annual basis. Interest Expense 15,000 Cash 15,000 The bonds have a face value of $250,000 and pay a stated interest rate of 6%. They were issued at a discount of $15,000 on January 1, 2020, to yield an effective-interest rate of 7%. (Assume that the effective-yield method should be used.) 4. Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2020 and 2021. Repairs in the amount of…The before-tax income for Blossom Co. for 2020 was $98,000 and $80,800 for 2021. However, the accountant noted that the following errors had been made: 1. Sales for 2020 included amounts of $40,700 which had been received in cash during 2020, but for which the related products were delivered in 2021. Title did not pass to the purchaser until 2021. 2. The inventory on December 31, 2020, was understated by $8,100. 3. The bookkeeper in recording interest expense for both 2020 and 2021 on bonds payable made the following entry on an annual basis. Interest Expense 16,800 Cash 16,800 The bonds have a face value of $280,000 and pay a stated interest rate of 6%. They were issued at a discount of $16,000 on January 1, 2020, to yield an effective-interest rate of 7%. (Assume that the effective-yield method should be used.) 4. Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2020 and…Roxas Company reported the following net income: 2018 - P1,750,000 2019 - P2,000,000 An examination of the accounting records for the year ended December 31, 2019 revealed that several errors were made. The following errors were discovered: • The footings and extensions showed that the inventory on December 31, 2018 was overstated by P190,000. • Prepaid insurance of P120,000 applicable to 2020 was expensed in 2019. • Interest receivable of P20,000 was not recorded on December 31, 2019. . On January 1, 2019, an equipment costing P400,000 was sold for P220,000. At the date of sale, the equipment had accumulated depreciation of P240,000. • The cash received was recorded as miscellaneous income in 2019. . In addition, depreciation was recorded for the equipment for 2019 at the rate of 10%. Required: 1. Prepare worksheet showing corrected net income for 2018 and 2019. 2. Prepare adjusting entries on December 31, 2019 assuming (a) books are still open and (b) books are already closed.
- ACDC Pty Ltd included inventory that had cost $55,000 at its market value of $75,000 in the statement of financial position for the year ended 30 June 2019. Which accounting principle has been violated?Assume that in 2021, Graham Company discovered that December 31, 2019 inventory was overstated. Discuss the impact that this error would have had on 2019 net income, 2020 net income and the combined net income of the two years.You have been engaged to audit the financial statements of LUNA Corp for the year ended December 31, 2020. Your audit reveals the following situations: 1. The physical inventory count on December 31, 2020, improperly included merchandise with a cost of P42,500 that had been recorded as a sale on December 29, 2020 and held for the customer to pick up on January 2, 2021. 2. In 2020, BSA sold for P18,500 fully depreciated equipment that originally cost P110,000. The proceeds from the sale were credited to the Equipment account. 3. BSA has a portfolio of current marketable equity securities acquired in 2019 for trading purposes. No valuation entry has been made. Information on cost and market value is as follows: Cost Market December 31, 2019 P 475,000 P 475,000 December 31, 2020…
