By how much would the December 31, 2021 retained earnings be misstated if no adjustments were made for the above errors?Compute for the adjusted net income for the year 2021. * You were first appointed auditor of the RST Corporation in 2020. You completed the audit for 2020 andprepared audited financial statements directly from the audit working papers. You have returned to makethe 2021 audit and discovered that the client's bookkeeper failed to record the adjusting entries you madein 2020 audit working papers, which entailed adjustments for the following items:The December 31, 2020 inventory was understated by P5,000.b. No entry was made for accrued utilities expense of P2,500 as of year- end.c. Ordinary motor repairs of P3,200 were charged to Accumulated Depreciation during 2020.d. The company failed to record the provision for uncollectible accounts in the amount of P6,000.а.Your examination of the 2021 entries in the accounts uncovered the following:An expenditure of P10,000 for repairs of office equipment had been charged to Furniture andEquipment. The company records depreciation at 10% of the December 31 balance of the Propertyand Equipment accounts.b. A 2020 account receivable in the amount of P14,000charge to Retained Earnings.Salesmen's commission includes P2,400 paid on undelivered customers' orders.а.been written off as uncollectible by aс.Additional data: The audited statement of 2020 showed a net income of P250,000 and the unadjusted netincome for 2021 is P230,000.

Year Reference Account Name Debit (P) Credit (P) Overstated/(Understated) retained earnings 2020…

Answered: By how much would the December 31, 2021…

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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Which general principle applies to the reporting of income tax expenses under interim income statement accounting principles A Reporting should not be done unless there are unusual events that occur in the period and are expect to affect the fiscal year tax liability. B Reporting should be based on a prorate share of the previous fiscal year’s taxes C Reporting should be based on an estimate of the effective annual tax rate and tax liability for the full fiscal year. D Reporting should be based on the last year’s effective tax rates and tax liability for the full fiscal year.
what is the net effect of the errors in the 2018 net income?
Expenditures currently deducted in the tax return but not included with expenses in the income statement until subsequent years create deferred tax liabilities. O True O False
Required: 1. Retained earnings - 2019 (restated)?
Refund of value added taxes in the current year which were erroneously paid in a prior year is generally Subject to final income tax Included in gross income O Not included in gross income O Deducted from retained earnings
The payment of supplier's account is debited to accounts receivable. What is the effect of the error in the net income of the current period and in subsequent period? Cannot be determined based.on the given information Overstated O Understated O No effect
20. A temporary difference arises when a revenue item is reported for tax purposes in a period After it is reportedin financial income Before it is reportedin financial income No Yes No No Yes No Yes Yes
The adjusting entry to record the accrual of income tax expense includes a: O A. credit to Income Tax Expense. B. debit to Income Tax Payable. C. credit to Accounts Payable. D. credit to Income Tax Payable.
WHY DOESNT THE NET INCOME AND RETAIN EARNING HAVE A 2020 AND 2021 COLUMN AS LIKE THE ASSET COLUMN
What is the Retained earnings - 2019 (restated) ?
The calculation of the times interest earned involves dividing net income by annual interest expense. net income plus income taxes by annual interest expense. net income plus income taxes and interest expense by annual interest expense. None of these answers are correct.
When they are net of taxes, prior period adjustments always increase the value of Retained Earnings * True False

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By how much would the December 31, 2021 retained earnings be misstated if no adjustments were made for the above errors? Compute for the adjusted net income for the year 2021. *