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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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Question

What is the correct net income/(loss) in 2020?

 

none of the choices

(23,200)

120,800

89,600

88,800

In line with your audit with DAVE, Inc. financial statements, the company accountant presented to you the balance sheet that follows. You reviewed the client's accounting records and books based thereon. You discovered that books of accounts are in agreement in the said balance sheet as presented below: DAVE, INC. STATEMENT OF FINANCIAL POSITION December 31, 2021 LIABILITIES AND OWNERS' ASSETS EQUITY Cash P 80,000 Accounts Payable P 32,000 Accounts Receivable 160,000 Notes Payable 64,000 Notes Receivable 48,000 Capital Stock 160,000 Inventories 400,000 Retained Earnings 432,000 Total P 688,000 Total P 688,000 Further review and investigation of the company's books revealed the following omissions and errors which were not corrected during the year of errors:
Transcribed Image Text:In line with your audit with DAVE, Inc. financial statements, the company accountant presented to you the balance sheet that follows. You reviewed the client's accounting records and books based thereon. You discovered that books of accounts are in agreement in the said balance sheet as presented below: DAVE, INC. STATEMENT OF FINANCIAL POSITION December 31, 2021 LIABILITIES AND OWNERS' ASSETS EQUITY Cash P 80,000 Accounts Payable P 32,000 Accounts Receivable 160,000 Notes Payable 64,000 Notes Receivable 48,000 Capital Stock 160,000 Inventories 400,000 Retained Earnings 432,000 Total P 688,000 Total P 688,000 Further review and investigation of the company's books revealed the following omissions and errors which were not corrected during the year of errors:
... Take quiz Further review and investigation of the company's books revealed the following omissions and errors which were not corrected during the year of errors: 2018 2019 2020 2021 Deferred expense 14,400 11,200 8,000 9,600 Deferred income 6,400 4,800 Accrued expense 3,200 1,200 1,600 800 Accrued income 2,000 2,400 Ending inventory - Overstated 112,000 128,000 Ending inventory - Understated 96,000 144,000 No dividends were declared during the years 2018 to 2021 and no adjustments were made to retained earnings. The company's reported the following net income: Year 2018 2019 2020 2021 Net Income P120,000 P88,000 P104,000 P120,000
Transcribed Image Text:... Take quiz Further review and investigation of the company's books revealed the following omissions and errors which were not corrected during the year of errors: 2018 2019 2020 2021 Deferred expense 14,400 11,200 8,000 9,600 Deferred income 6,400 4,800 Accrued expense 3,200 1,200 1,600 800 Accrued income 2,000 2,400 Ending inventory - Overstated 112,000 128,000 Ending inventory - Understated 96,000 144,000 No dividends were declared during the years 2018 to 2021 and no adjustments were made to retained earnings. The company's reported the following net income: Year 2018 2019 2020 2021 Net Income P120,000 P88,000 P104,000 P120,000
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