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Compute for the following: a. Accumulated profit as of December 31, 2018 and 2020 b. Profit (Loss) for the years ended December 31, 2018 and 2019

Compute for the following: a. Accumulated profit as of December 31, 2018 and 2020 b. Profit (Loss) for the years ended December 31, 2018 and 2019

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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PROBLEM 4: (ERROR CORRECTION) You are auditing the financial statements of Brin Inc. for the year 2020. The details of the unadjusted balances of its Accumulated Profit account are as follows: ACCUMULATED PROFIT Date Particulars Debit Credit Balance Beginning Balance Gain on sale of treasury shares Net income for the year Payment of dividends declared in 2018 Paid in capital in excess of par Loss on sale of treasury shares Net loss for the year Net income for the year Payment of dividends declared in 2019 01.01.2018 500,000 540,000 740,000 670,000 690,000 660,000 580,000 730,000 640,000 08.31.2018 40,000 200,000 12.31.2018 02.28.2019 70,000 05.31.2019 20,000 07.31.2019 30,000 80,000 12.31.2019 12.31.2020 150,000 12.31.2020 90,000 Your examination disclosed the following: a. Omissions at the end of each year of the following: 2017 2018 2019 2020 Merchandise Inventory, end | Accrued Expense 4,000 7,000 3,000 5,000 b. The cost of major repairs on the company's equipment on January 1, 2018 in the amount of P150,000 was expensed outright. Remaining life of the equipment on January 1, 2018 was 6 years. c. On January 1, 2019, the company paid an operating expense in the amount of P15,000 covering the period, 2019 to 2021. The company charged the entire payment as outright expense and no adjusting journal entry was ever made pertinent to this transaction. Compute for the following: a. Accumulated profit as of December 31, 2018 and 2020 b. Profit (Loss) for the years ended December 31, 2018 and 2019
Transcribed Image Text:PROBLEM 4: (ERROR CORRECTION) You are auditing the financial statements of Brin Inc. for the year 2020. The details of the unadjusted balances of its Accumulated Profit account are as follows: ACCUMULATED PROFIT Date Particulars Debit Credit Balance Beginning Balance Gain on sale of treasury shares Net income for the year Payment of dividends declared in 2018 Paid in capital in excess of par Loss on sale of treasury shares Net loss for the year Net income for the year Payment of dividends declared in 2019 01.01.2018 500,000 540,000 740,000 670,000 690,000 660,000 580,000 730,000 640,000 08.31.2018 40,000 200,000 12.31.2018 02.28.2019 70,000 05.31.2019 20,000 07.31.2019 30,000 80,000 12.31.2019 12.31.2020 150,000 12.31.2020 90,000 Your examination disclosed the following: a. Omissions at the end of each year of the following: 2017 2018 2019 2020 Merchandise Inventory, end | Accrued Expense 4,000 7,000 3,000 5,000 b. The cost of major repairs on the company's equipment on January 1, 2018 in the amount of P150,000 was expensed outright. Remaining life of the equipment on January 1, 2018 was 6 years. c. On January 1, 2019, the company paid an operating expense in the amount of P15,000 covering the period, 2019 to 2021. The company charged the entire payment as outright expense and no adjusting journal entry was ever made pertinent to this transaction. Compute for the following: a. Accumulated profit as of December 31, 2018 and 2020 b. Profit (Loss) for the years ended December 31, 2018 and 2019
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