1. While examining the December 31, 2014 financial statements of Dawn Company, you discover the following: a) Inventory at January 1, 2014 had been overstated by P30,000. b) Inventory at December 31, 2014 was understated by P50,000. c) During 2014, Dawn received a P100,000 cash advance from a customer for merchandise to be manufactured and shipped during 2014. The amount was credited to sales revenue. d) The net income reported on the 2014 profit or loss before reflecting any adjustments for the above items is P3,000,000. What is the corrected net income for the year ended December 31, 2014?
1. While examining the December 31, 2014 financial statements of Dawn Company, you discover the following: a) Inventory at January 1, 2014 had been overstated by P30,000. b) Inventory at December 31, 2014 was understated by P50,000. c) During 2014, Dawn received a P100,000 cash advance from a customer for merchandise to be manufactured and shipped during 2014. The amount was credited to sales revenue. d) The net income reported on the 2014 profit or loss before reflecting any adjustments for the above items is P3,000,000. What is the corrected net income for the year ended December 31, 2014?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. While examining the December 31, 2014 financial statements of Dawn Company, you discover
the following:
a) Inventory at January 1, 2014 had been overstated by P30,000.
b) Inventory at December 31, 2014 was understated by P50,000.
c) During 2014, Dawn received a P100,000 cash advance from a customer for merchandise to
be manufactured and shipped during 2014. The amount was credited to sales revenue.
d) The net income reported on the 2014 profit or loss before reflecting any adjustments for the
above items is P3,000,000.
What is the corrected net income for the year ended December 31, 2014?
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