15. Accrued salaries payable of P70,000 were not recorded at December 31, 2017.Prepaid insurance of P30,000 at December 31, 2018 were erroneously treated asexpense. Neither of these errors was discovered nor corrected. The effect ofthese two errors would causeA. 2018 profit to be understated P100,000 and December 31, 2018 retainedearnings to be understated P30,000.B. 2017 profit and December 31, 2017 retained earnings to be understatedP70,000 each.C. 2017 profit to be overstated P40,000 and 2018 profit to be understatedP30,000.D. 2018 profit and December 31, 2018 retained earnings to be understatedP30,000 each.

When accrued salary is not recorded then the profit is understated by P70,000 in the year 2017,…

15. Accrued salaries payable Prepaid insurance of P30,C expense. Neither of thes these two errors would ca A. 2018 profit to be unc earnings to be unders B. 2017 profit and Dece P70,000 each. C. 2017 profit to be ove P30,000. D. 2018 profit and Dece P30,000 each.

15. Accrued salaries payable Prepaid insurance of P30,C expense. Neither of thes these two errors would ca A. 2018 profit to be unc earnings to be unders B. 2017 profit and Dece P70,000 each. C. 2017 profit to be ove P30,000. D. 2018 profit and Dece P30,000 each.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Prepare a balance sheet for East & West Insurance on 31/12/2017 Following are balances from the books of East & West Insurance on 31/12/2017 (in JDs); Reinsurance receivable 9 000, Gross written premiums 25 000, Ceded premiums 7000 Reinsurance share in paying claims 2000, Deferred income tax 1800, Unearned premium reserve, net 4000, Accrued expenses1250, Income tax provision 350O, Reinsurance share of written premiums 10 000, Net change in unearned premiums reserve 1000, Recoveries 1000, Statutory reserve 7000, Outstanding claims reserve, net 2500, Checks under collection 5000, Paid claims12 000, Allocated employees' expenses 3000, Policies acquisition costs 250, Paid in capital ???, Reinsurance payable 5500, Accrued expenses 2500, Property and equipment, net 30 00O, Cash in hands and at banks 12000, Accounts Receivable 7000, Bank deposits, 50 000, Financial assets at fair value through profit or loss 12000, Allowance for doubtful debts 1000, Commissions revenue 1 200, Interest revenue…
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