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3. What is the total effect of the errors on the balance of the company's retained earnings at December 31, 2021? a. increased by P177,550 b. decreased by P122,050 c. decreased by P132,550 d. increased by P171,550

3. What is the total effect of the errors on the balance of the company's retained earnings at December 31, 2021? a. increased by P177,550 b. decreased by P122,050 c. decreased by P132,550 d. increased by P171,550

FINANCIAL ACCOUNTING
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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whats the answer in question 3?

Chapter 1: Audit Planning and Misstate ment Determine the following as a result of your audit: 1. What is the total effect of the errors on the 2020 net income? a. increased by P15,000 b. decreased by P22,000 c. decreased by P32,500 d. increased by P11,500 2. What is the total effect of the errors on the 2021 net income? a. increased by P210,050 b. decreased by P205,550 c. decreased by P132,500 d. increased by P242,550 3. What is the total effect of the errors on the balance of the company's retained earnings at December 31, 2021? a. increased by P177,550 b. decreased by P122,050 c. decreased by P132,550 d. increased by P171,550 4. What is the total effect of the errors on the company's working capital at December 31, 2021? a. decreased by P150,550 b. decreased by P202,000 2 c. decreased by P302,500 d. decreased by P310,100 5. The necessary adjusting journal entry for the error in recording capital expenditures on Machinery as of December 31, 2021 would include a: a. a debit to machinery of P543,000 b. a credit to retained earnings of P323,250 c. a debit to depreciation expense of P13,050 d. a credit to accumulated depreciation of P41,250 Case 6
Transcribed Image Text:Chapter 1: Audit Planning and Misstate ment Determine the following as a result of your audit: 1. What is the total effect of the errors on the 2020 net income? a. increased by P15,000 b. decreased by P22,000 c. decreased by P32,500 d. increased by P11,500 2. What is the total effect of the errors on the 2021 net income? a. increased by P210,050 b. decreased by P205,550 c. decreased by P132,500 d. increased by P242,550 3. What is the total effect of the errors on the balance of the company's retained earnings at December 31, 2021? a. increased by P177,550 b. decreased by P122,050 c. decreased by P132,550 d. increased by P171,550 4. What is the total effect of the errors on the company's working capital at December 31, 2021? a. decreased by P150,550 b. decreased by P202,000 2 c. decreased by P302,500 d. decreased by P310,100 5. The necessary adjusting journal entry for the error in recording capital expenditures on Machinery as of December 31, 2021 would include a: a. a debit to machinery of P543,000 b. a credit to retained earnings of P323,250 c. a debit to depreciation expense of P13,050 d. a credit to accumulated depreciation of P41,250 Case 6
a. Po40,000 You are auditing the financial statement of Pasig Company for the first fime You have discovered that the merchandise inventory at the end Case 5 each asn respectively. In addition, in inspecting the record of the company, you discovered that some items had been improperly recorded and that certain year-end adjustments had been overlooked in 2020 and 2021. These omission and other errors for each year were summarized as follows: em 12/31/2020 P436,800 129,600 192,000 12/31/2021 Accrued Salaries Accrued Interests Income P390,000 106,500 153,900 Prepaid Insurance Advances from Customers (Collections from customers had been recorded as sales but should have been recognized as advances from customers because goods were not shipped until the following year) Machinery (Capital expenditures had been records as repairs but should have been charged to Machinery; the depreciation rate is 10% per year, but depreciation in the year of expenditure is to be recognized at 5%.) 280,500 235,200 261,000 282,000
Transcribed Image Text:a. Po40,000 You are auditing the financial statement of Pasig Company for the first fime You have discovered that the merchandise inventory at the end Case 5 each asn respectively. In addition, in inspecting the record of the company, you discovered that some items had been improperly recorded and that certain year-end adjustments had been overlooked in 2020 and 2021. These omission and other errors for each year were summarized as follows: em 12/31/2020 P436,800 129,600 192,000 12/31/2021 Accrued Salaries Accrued Interests Income P390,000 106,500 153,900 Prepaid Insurance Advances from Customers (Collections from customers had been recorded as sales but should have been recognized as advances from customers because goods were not shipped until the following year) Machinery (Capital expenditures had been records as repairs but should have been charged to Machinery; the depreciation rate is 10% per year, but depreciation in the year of expenditure is to be recognized at 5%.) 280,500 235,200 261,000 282,000
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