Homework Help is Here – Start Your Trial Now!
Business
Accounting
a. Prepare a schedule to correct the reported profit for each year b. Prepare the necessary correcting entries in 2020, assuming that the books for 2020 are still open.

a. Prepare a schedule to correct the reported profit for each year b. Prepare the necessary correcting entries in 2020, assuming that the books for 2020 are still open.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
2 3 For the three consecutive years, the River Company failed to recognize accruals, prepayments, and other 4 transactions in its records. Reported profits and a listing of errors appear below. 2018 2019 2020 Reported profit (loss) a. Failed to record accrued expenses c. Overstated ending inventories c. Failed to record accrued interest on notes receivable d. Failed to recognize unearned rent e. Failed to record purchases on account; purchases were recorded when paid in the subsequent year; merchandise properly included in ending inventory f. Repairs and maintenance incurred during the year capitalized as part of asset cost. Full year depreciation at an annual rate of 10% is 7 P490,000 P670,000 P(320,000) 8 34,000 28,000 43,000 9 63,000 28,000 36,000 10 12,000 6,000 8,000 11 24,000 20,000 18,000 12 25,000 20,000 13 14 15 120,000 80,000 16 17 provided in the year that the asset is recognized. 18 g. Failed to recognized insurance at yearend 4,800 6,200 7,800 19 20 a. Prepare a schedule to correct the reported profit for each year 21 22 23 b. Prepare the necessary correcting entries in 2020, assuming that the books for 2020 are still open. 24
Transcribed Image Text:2 3 For the three consecutive years, the River Company failed to recognize accruals, prepayments, and other 4 transactions in its records. Reported profits and a listing of errors appear below. 2018 2019 2020 Reported profit (loss) a. Failed to record accrued expenses c. Overstated ending inventories c. Failed to record accrued interest on notes receivable d. Failed to recognize unearned rent e. Failed to record purchases on account; purchases were recorded when paid in the subsequent year; merchandise properly included in ending inventory f. Repairs and maintenance incurred during the year capitalized as part of asset cost. Full year depreciation at an annual rate of 10% is 7 P490,000 P670,000 P(320,000) 8 34,000 28,000 43,000 9 63,000 28,000 36,000 10 12,000 6,000 8,000 11 24,000 20,000 18,000 12 25,000 20,000 13 14 15 120,000 80,000 16 17 provided in the year that the asset is recognized. 18 g. Failed to recognized insurance at yearend 4,800 6,200 7,800 19 20 a. Prepare a schedule to correct the reported profit for each year 21 22 23 b. Prepare the necessary correcting entries in 2020, assuming that the books for 2020 are still open. 24
Expert Solution
steps

Step by step

Solved in 3 steps with 3 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Tax loss carryovers
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS