1. What amount should be reported as net effect of the errors on net income for 2020? a. 250000 understated b. 250000 overstated c. 500000 understated d. 0 2. What amount should be reported as net effect of the errors on retained earnings for December 31, 2021? a. 1150000 understated b. 1150000 overstated c. 900000 understated d. 900000 overstated 3. What amount should be reported as net effect of the errors on net income for 2021? a. 1150000 understated b. 1150000 overstated c. 1250000 understated d. 1250000 overstated
1. What amount should be reported as net effect of the errors on net income for 2020? a. 250000 understated b. 250000 overstated c. 500000 understated d. 0 2. What amount should be reported as net effect of the errors on retained earnings for December 31, 2021? a. 1150000 understated b. 1150000 overstated c. 900000 understated d. 900000 overstated 3. What amount should be reported as net effect of the errors on net income for 2021? a. 1150000 understated b. 1150000 overstated c. 1250000 understated d. 1250000 overstated
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 21GI: Indicate the effect of each of the following errors on the following balance sheet and income...
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1. What amount should be reported as net effect of the errors on net income for 2020?
a. 250000 understated
b. 250000 overstated
c. 500000 understated
d. 0
2. What amount should be reported as net effect of the errors on retained earnings for December 31, 2021?
a. 1150000 understated
b. 1150000 overstated
c. 900000 understated
d. 900000 overstated
3. What amount should be reported as net effect of the errors on net income for 2021?
a. 1150000 understated
b. 1150000 overstated
c. 1250000 understated
d. 1250000 overstated
![Emma Company revealed the following errors in the
financial statements:
500,000
800,000
250.000
December 31, 2020 inventory understated
December 31, 2021 inventory overstated
Depreciation for 2020 overstated
300.000
150,000
December 31, 2021 accrued rent income overstated
December 31, 2021 accrued salaries understated
The understatement of the 2020 ending inventory pertains
to goods in transit purchased FOB shipping point which were
not recorded in 2020 but paid in 2021.
On December 31, 2021, fully depreciated machinery was sold
for P100,000 cash but the sale was not recorded until 2022](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4ae95eb6-776b-47a8-8418-447ba49b400b%2F743c613d-b980-4f26-be9a-4b13c7c188b3%2Fp5vcz3c_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Emma Company revealed the following errors in the
financial statements:
500,000
800,000
250.000
December 31, 2020 inventory understated
December 31, 2021 inventory overstated
Depreciation for 2020 overstated
300.000
150,000
December 31, 2021 accrued rent income overstated
December 31, 2021 accrued salaries understated
The understatement of the 2020 ending inventory pertains
to goods in transit purchased FOB shipping point which were
not recorded in 2020 but paid in 2021.
On December 31, 2021, fully depreciated machinery was sold
for P100,000 cash but the sale was not recorded until 2022
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