BETA Company began operations in January 2021. Financial statements for the years ended December 31, 2021 and 2022 contained the following errors: • Ending inventory, 2021 - P16,000 understated • Ending inventory, 2022 - P15,000 overstated • Depreciation expense, 2021 - P6,000 understated • Insurance expense, 2021 - P10,000 overstated • Insurance expense, 2022 - P10,000 understated • Prepaid insurance, 2021 - P10,000 understated • In addition, on December 31, 2022, a fully depreciated machinery was sold for P10,800 cash, but the sale was not recorded until 2023. There were no other errors during 2021 and 2022 and no correction have been made for any of the errors.

BETA Company began operations in January 2021. Financial statements for the years ended December 31, 2021 and 2022 contained the following errors: • Ending inventory, 2021 - P16,000 understated • Ending inventory, 2022 - P15,000 overstated • Depreciation expense, 2021 - P6,000 understated • Insurance expense, 2021 - P10,000 overstated • Insurance expense, 2022 - P10,000 understated • Prepaid insurance, 2021 - P10,000 understated • In addition, on December 31, 2022, a fully depreciated machinery was sold for P10,800 cash, but the sale was not recorded until 2023. There were no other errors during 2021 and 2022 and no correction have been made for any of the errors.

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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