19. Fuschia Company is a calendar year corporation. Its financial statements for the years 2018 and 2017 contained errors as follows: 2017 P400,000 understated 200,000 overstated 350,000 overstated 2018 Ending inventory Depreciation expense 500,000 understated Rent income P300,000 overstated ? Unearned rent income 350,000 understated Assume that no correcting entries were made at December 31, 2017. By how much will 2018 profit before income taxes be overstated because of the foregoing errors? A. P850,000 B. P800,000 C. P750,000 D. P250,000

19. Fuschia Company is a calendar year corporation. Its financial statements for the years 2018 and 2017 contained errors as follows: 2017 P400,000 understated 200,000 overstated 350,000 overstated 2018 Ending inventory Depreciation expense 500,000 understated Rent income P300,000 overstated ? Unearned rent income 350,000 understated Assume that no correcting entries were made at December 31, 2017. By how much will 2018 profit before income taxes be overstated because of the foregoing errors? A. P850,000 B. P800,000 C. P750,000 D. P250,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

19. Fuschia Company is a calendar year corporation. Its financial statements for the
years 2018 and 2017 contained errors as follows:
2017
P400,000 understated
200,000 overstated
350,000 overstated
2018
Ending inventory
Depreciation expense 500,000 understated
Rent income
Unearned rent income 350,000 understated
P300,000 overstated
Assume that no correcting entries were made at December 31, 2017. By how
much will 2018 profit before income taxes be overstated because of the
foregoing errors?
A. P850,000
B. P800,000
C. P750,000
D. P250,000
20.
Assume that no correcting entries were made in both 2017 and 2018. For how
much was the retained earnings understated or overstated as of December 31,
2018?
A. P600,000 overstated
B. P800,000 overstated
C. P1,050,000 overstated
D. P200,000 understated

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