1. The next three items are based on the following: The bookkeeper of Latsch Company, which has an accounting year ending December 31, made the following errors: • A ₱ 1,000 collection from a customer was received on December 29, 20x0, but not recorded until the date of its deposit in the bank, January 4, 20x1. • A supplier's ₱ 1,600 invoice for inventory items received in December 20x0 was not recorded until January 20x1. (Inventories at December 31, 20x0 and 20x1, were stated correctly, based on physical count.) • Depreciation for 20x0 was understated by ₱ 900. In September 20x0, a ₱ 200 invoice for office supplies was charged to the Utilities Expense account. Office supplies are expensed as purchased. • December 31, 20x0, sales on account of ₱ 3,000 were recorded in January 20x1. 1. 1. Assume that no other errors have occurred and that no correcting entries have been made. Ignore income taxes. Profit for 20x0 was a. Understated by ₱ 500. c. Overstated by ₱ 2,500. b. Understated by ₱ 2,100. d. Neither understated nor overstated. 1. 2. Assume the same facts as above. Working capital at December 31, 20x0, was a. Understated by ₱ 3,000. c. Understated by ₱ 1,400. b. Understated by ₱ 500. d. Neither understated or overstated. 1. 3. Assume the same facts as above. Total assets at December 31, 20x0, were a. Overstated by ₱ 2,500. c. Understated by ₱ 2,500. b. Overstated by ₱ 2,100. d. None of the above. 2. Bren Co.'s beginning inventory at January 1, 20x3, was understated by ₱ 26,000, and its ending inventory was overstated by ₱ 52,000. As a result, Bren's cost of goods sold for 20x3 was a. Understated by ₱ 26,000. c. Understated by ₱ 78,000. b. Overstated by ₱ 26,000. d. Overstated by ₱ 78,000.
1. The next three items are based on the following:
The bookkeeper of Latsch Company, which has an accounting year ending December 31, made the following errors:
• A ₱ 1,000 collection from a customer was received on December 29, 20x0, but not recorded until the date of its deposit in the bank, January 4, 20x1.
• A supplier's ₱ 1,600 invoice for inventory items received in December 20x0 was not recorded until January 20x1. (Inventories at December 31, 20x0 and 20x1, were stated correctly, based on physical count.)
•
• December 31, 20x0, sales on account of ₱ 3,000 were recorded in January 20x1.
1. 1. Assume that no other errors have occurred and that no correcting entries have been made. Ignore income taxes. Profit for 20x0 was
a. Understated by ₱ 500.
c. Overstated by ₱ 2,500.
b. Understated by ₱ 2,100.
d. Neither understated nor overstated.
1. 2. Assume the same facts as above.
a. Understated by ₱ 3,000.
c. Understated by ₱ 1,400.
b. Understated by ₱ 500.
d. Neither understated or overstated.
1. 3. Assume the same facts as above. Total assets at December 31, 20x0, were
a. Overstated by ₱ 2,500.
c. Understated by ₱ 2,500.
b. Overstated by ₱ 2,100.
d. None of the above.
2. Bren Co.'s beginning inventory at January 1, 20x3, was understated by ₱ 26,000, and its ending inventory was overstated by ₱ 52,000. As a result, Bren's cost of goods sold for 20x3 was
a. Understated by ₱ 26,000.
c. Understated by ₱ 78,000.
b. Overstated by ₱ 26,000.
d. Overstated by ₱ 78,000.
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