Atlantic Company reported the following net income: Year 2021 - P 4,000,000, and year 2022 - P 5,000,000. During your audit for the year 2022, the following errors were revealed:A cash collection of P 100,000 was received from a customer on December 28, 2022 but not recorded until January 4, 2023.Received a supplier's invoice on December 29, 2022 for P 160,000 worth of merchandise also received on the same date but no entry was made until January 5, 2023.Inventories on December 31, 2021 and 2022 wee correctly stated.Depreciation for the year 2021 was understated by P 90,000.The office supplies purchased on November 10, 2022 amounting to P 20,000 was charged to purchases account. The company's accounting policy is to expense office supplies as expensed when incurred.Sales invoice dated December 30, 2022 amounting to P 300,000 was recorded only on January 3, 2023.What is the corrected net income for the year 2022? a. 3,910,000b. 5,140,000c. 4,540,000d. 5,460,000

Given net income for 2022 before adjusting errors is P 5,000,000. The errors found during the year…

Answered: Atlantic Company reported the following…

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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Atlantic Company reported the following net income: Year 2021 - P 4,000,000, and year 2022 - P 5,000,000. During your audit for the year 2022, the following errors were revealed:

A cash collection of P 100,000 was received from a customer on December 28, 2022 but not recorded until January 4, 2023.
Received a supplier's invoice on December 29, 2022 for P 160,000 worth of merchandise also received on the same date but no entry was made until January 5, 2023.
Inventories on December 31, 2021 and 2022 wee correctly stated.
Depreciation for the year 2021 was understated by P 90,000.
The office supplies purchased on November 10, 2022 amounting to P 20,000 was charged to purchases account. The company's accounting policy is to expense office supplies as expensed when incurred.
Sales invoice dated December 30, 2022 amounting to P 300,000 was recorded only on January 3, 2023.

What is the corrected net income for the year 2022?

a. 3,910,000
b. 5,140,000
c. 4,540,000
d. 5,460,000

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