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By what amount will income (before taxes) be adjusted up or down as a result of the corrections? Adjust income $ tA

By what amount will income (before taxes) be adjusted up or down as a result of the corrections? Adjust income $ tA

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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At December 31, 2024, Michelle Walker Corporation reported current assets of $344,933 and current liabilities of $192,700. The following items may have been recorded incorrectly. Walker uses a perpetual inventory system. 1. Goods purchased costing $21,090 were shipped f.o.b. shipping point by a supplier on December 28. Walker received and recorded the invoice on December 29, 2024, but the goods were not included in Walker’s inventory because they were not received until January 4, 2025. 2. Goods purchased costing $16,010 were shipped f.o.b. destination by a supplier on December 26. Walker received and recorded the invoice on December 31, but the goods were not included in Walker’s 2024 inventory because they were not received until January 2, 2025. 3. Goods held on consignment from Claudia Kishi Company were included in Walker’s December 31, 2024, inventory at $12,250.
Transcribed Image Text:At December 31, 2024, Michelle Walker Corporation reported current assets of $344,933 and current liabilities of $192,700. The following items may have been recorded incorrectly. Walker uses a perpetual inventory system. 1. Goods purchased costing $21,090 were shipped f.o.b. shipping point by a supplier on December 28. Walker received and recorded the invoice on December 29, 2024, but the goods were not included in Walker’s inventory because they were not received until January 4, 2025. 2. Goods purchased costing $16,010 were shipped f.o.b. destination by a supplier on December 26. Walker received and recorded the invoice on December 31, but the goods were not included in Walker’s 2024 inventory because they were not received until January 2, 2025. 3. Goods held on consignment from Claudia Kishi Company were included in Walker’s December 31, 2024, inventory at $12,250.
**Income Adjustment Inquiry** This section asks the question: "By what amount will income (before taxes) be adjusted up or down as a result of the corrections?" **Input Field** - **Adjust income**: A box is provided for users to input the amount in dollars ($) by which the income should be adjusted. This is meant to capture the estimated change in income before considering taxes, based on necessary corrections. This tool is likely used in a financial or accounting context to recalibrate income figures due to new insights or rectifications.
Transcribed Image Text:**Income Adjustment Inquiry** This section asks the question: "By what amount will income (before taxes) be adjusted up or down as a result of the corrections?" **Input Field** - **Adjust income**: A box is provided for users to input the amount in dollars ($) by which the income should be adjusted. This is meant to capture the estimated change in income before considering taxes, based on necessary corrections. This tool is likely used in a financial or accounting context to recalibrate income figures due to new insights or rectifications.
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