Kindly help me with accounting questions Company ABC reported initial net income of $8,500 and end-of-yearretained earnings of $52,000. During the year-end audit, it was discoveredthat:⚫ Revenues were undercounted by $3,000⚫ Depreciation expense was overcounted by $1,200⚫ Insurance expense was undercounted by $800 Calculate the adjustednet income.

Step 1: Definition of Adjusted Net IncomeAdjusted net income reflects corrections to errors in the…

Answered: Company ABC reported initial net income…

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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The audited accounts of Lindsay Co. for year-end August 31, 2014 show a profit of $3,115,000 after charging the following: Depreciation 430,000 Rent 175,000Legal fees 1,350,000Audit fees 88,000 Donations 119,000Bad debts 242,000Foreign Travel 395,750Interest payments 62,375 Other Information: a. Legal fees are as follows: Expenses in respect of recovery of debts, $585,000 Expenses related to the increase private share capital, $765,000 b. Lindsay Co. donated $65,500 to UTECH University and $53,500 to HELP, a private charity registered under the Charities Act. c. Bad debts are as follows: • A loan of $76,130 to Derek Stan who failed to repayit. • $63,017, owed by Simplicity Ltd. which was declared bankrupt. • The balance is a percentage of receivables at year end which is deemed to be bad. d. Foreign travel expense included $268,210 for a vacation package for the marketing manager’s and his family plane tickets. The remaining…
Dayton Corporation began the current year with a retained earnings balance of $16,873. During the year, the company corrected an error made in the prior year, which was a failure to record depreciation expense of $2,491 on a piece of equipment. Also, during the current year, the company earned net income of $12,824 and declared cash dividends of $4,659. Compute the year-end retained earnings balance. Oa. $36,847 b. $22,547 c. $16,873 Od. $25,038
E4-19 (Algo) Reporting a Correct Income Statement with Earnings per Share to Include the Effects of Adjusting Entries and Evaluating Total Asset Turnover as an Auditor LO4-1, 4-2, 4-3 Jay, Inc., a party rental business, completed its third year of operations on December 31. Because this is the end of the annual accounting period, the company bookkeeper prepared the following tentative income statement: Income Statement Rent revenue $ 106,000 Expenses: Salaries and wages expense 25,400 Maintenance expense 11, 200 Rent expense 7,600 Utilities expense 3,500 Gas and oil expense 3,500 Miscellaneous expenses (items not listed elsewhere) 1,900 Total expenses 53,100 Income $ 52,900 You are an independent CPA hired by the company to audit the company's accounting systems and review the financial statements. In your audit, you developed additional data as follows: a. Wages for the last three days of December amounting to $630 were not recorded or paid. b. Jay estimated telephone usage at $370…
The income statement disclosed the following items for the year: Depreciation expense $40,700 Gain on disposal of equipment 23,760 Net income 254,700 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $6,340 Inventory (3,610) Prepaid insurance (1,350) Accounts payable (4,300) Income taxes payable 1,350 Dividends payable 950 a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from (used for) operating activities: Adjustments to reconcile net income to net cash flows from (used for) operating activities: Changes in current operating assets and liabilities: Net cash flows from operating activities b. Why is net cash flows from operating activities different than net income? Cash flows…
On December 31, 2018, Lance Company prepared an income statement and balance sheet. Total: Revenues, Expenses, Net Income, Assets, Liabilities, and Stockholders' Equity had the following balances, respectively: Net Revenues Expenses Total Assets $40,000 $100,000 $30,000 Total Liabilities Stockholders' Equity $70,000 Income 120,000 80,000 During audit, the auditor detected that the following transaction was not recorded: Sold $30,000 merchandise in cash. Sales taxes was 6% which was not included in the price. Merchandise sold had cost company 18,000 to purchase. What would be the total amount of Revenues, Expenses, Net Income, Assets, Liabilities, and Stockholders' Equity, after recording the above transaction. Net Revenues Experkses Income Total Assets Total Liabilities Stockholders' Equity Balance: Before 120,000 80,000 $40,000 $100,000 $30,000 $70,000 trans. After trans
(Error Analysis and Correcting Entry) The reported net incomes for the first 2 years of Sandra Gustafson Products, Inc., were as follows: 2017, $147,000; 2018, $185,000. Early in 2019, the following errors were discovered.1. Depreciation of equipment for 2017 was overstated $17,000.2. Depreciation of equipment for 2018 was understated $38,500.3. December 31, 2017, inventory was understated $50,000.4. December 31, 2018, inventory was overstated $16,200.InstructionsPrepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.)
The income statement disclosed the following items for the year: Depreciation expense $53,200 Gain on disposal of equipment 31,010 Net income 419,900 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $8,280 Inventory (4,710) Prepaid insurance (1,770) Accounts payable (5,610) Income taxes payable 1,770 Dividends payable 1,240 a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
General accounting
The income statement disclosed the following items for the year: Depreciation expense $57,400 Gain on disposal of equipment 33,510 Net income 494,300 The changes in the current asset and liability accounts for the year are as follows: Increase(Decrease) Accounts receivable $8,950 Inventory (5,090) Prepaid insurance (1,910) Accounts payable (6,070) Income taxes payable 1,910 Dividends payable 1,340 a. Prepare the “Cash flows from operating activities” section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.
The audited accounts of Lindsay Co. for year-end August 31, 2014 show a profit of $3,115,000 after charging the following: Depreciation 430,000 Rent 175,000 Legal fees 1,350,000 Audit fees 88,000 Donations 119,000 Bad debts 242,000 Foreign Travel 395,750 Interest payments 62,375 Other Information: a. Legal fees are as follows: Expenses in respect of recovery of debts, $585,000 Expenses related to the increase private share capital, $765,000 b. Lindsay Co. donated $65,500 to UTECH University and $53,500 to HELP, a private charity registered under the Charities Act. c. Bad debts are as follows: • A loan of $76,130 to Derek Stan who failed to repayit. • $63,017, owed by Simplicity Ltd. which was declared bankrupt. • The balance is a percentage of receivables at year end which is deemed to be bad. d. Foreign travel expense included $268,210 for a vacation package for the marketing manager’s and his family plane…
Shep Company's records show the following information for the current year. Beginning of year End of year Total assets $ 51, 600 $ 82,000 Total liabilities $ 22, 800 $ 35, 800 Determine net income (loss) for each of the following separate situations. Note: For all requirements, losses should be entered with a minus sign. Additional owner investments of $3,800 were contributed, and withdrawals of $7,800 were made during the current year. Additional owner investments of $15, 200 were contributed, and no withdrawals were made during the current year. No additional owner investments were contributed, and withdrawals of $12, 800 were made during the current year.
Baxter Company reported a net loss of $16,324 for the year ended December 31. During the year, accounts receivable decreased by $4,513, merchandise inventory increased by $9,092, accounts payable increased by $8,534, and depreciation expense of $4,402 was recorded. During the year, operating activities under the indirect method Oa. used net cash of $16,324 Ob. used net cash of $7,967 Oc. provided net cash of $7,967 Od. provided net cash of $16,324

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