During 2024, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts: 2022 understated by 2023 overstated by $ 127,000 157,000 WMC uses a periodic inventory system and the FIFO cost method. Required: 1. Determine the effect of these errors on retained earnings at January 1, 2024, before any adjustments Dgnore income taxes 2. Prepare a journal entry to correct the errors Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the effect of these errors on retained earnings at January 1, 2024, before and adjustments. (forore income tas) Retened angs would be Required 2 >

During 2024, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts: 2022 understated by 2023 overstated by $ 127,000 157,000 WMC uses a periodic inventory system and the FIFO cost method. Required: 1. Determine the effect of these errors on retained earnings at January 1, 2024, before any adjustments Dgnore income taxes 2. Prepare a journal entry to correct the errors Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the effect of these errors on retained earnings at January 1, 2024, before and adjustments. (forore income tas) Retened angs would be Required 2 >

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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Toolum Corporation began operations on January 1, 2020, and uses the average-cost method of pricing inventory. Management is contemplating a change ininventory methods for 2023. The following information is available for the years2020–2022 Requirements:(Ignore all tax effects.)a. Prepare the journal entry necessary to record a change from the average-costmethod to the FIFO method in 2023. Show all workings b. Determine net income to be reported for 2020, 2021, and 2022, after givingeffect to the change in accounting policy.
You are examining the financial statements of France Company for the year ended December 31, 2022. It uses the physical inventory system of accounting for inventory. During your examination, you discovered that the 2023 sales of P 120,000 were recorded in 2022; goods were excluded in the 2022 ending inventory at a cost of 70,000. Based on the foregoing, answer the following questions: Question 1: Which of the following accounts is(are) overstated by P 120,000 at the end of year 2022 as a result of the error? Select 1 sales Onlv a. Sales and Accounts Receivable b. Inventory, December 31, 2022 only c. Retained Earnings only Question 2: Which of the following accounts is (are) understated by p 70,000 at the end of year 2022 as a result of the error? Select 1 a. retained earnings b. inventory, december 31,2022 c. sales and accounts receivable d. sales and retained earnings
The following errors were discovered in the preparation of the financial statements of Uni-Focus Company for the year ended November 30, 2021. Goods held on consignment from Tri-Facet Ltd. with a cost of $17,940 were incorrectly included in Uni-Focus Company’s inventory on November 30, 2020. The goods were not sold during the 2021 year and were returned to Tri-Facet. The goods were not included in Uni-Focus Company’s November 30, 2021 inventory count. Assume that Uni-Focus Company’s Inventory account accurately reflects the results of the November 30, 2021 count. During the first week of December 2017, office furniture was purchased for $18,505. The entire purchase was recorded with a debit to Office Supplies Expense, and a credit to Cash. Uni-Focus expected to keep the furniture for 10 years and sell it for $675 at the end of the asset’s useful life. Uni-Focus Company uses the straight-line method of depreciation for furniture. On December 1, 2019, Uni-Focus Company paid an…
Ignoring income taxes, what is the total effect of the errors on the beginning balance of retained earnings for the year 2023? ( Leave the numerical figure positive, put a dash then identify if OVERSTATED or UNDERSTATED, example: 25000-OVERSTATED)
McLelland Inc. reported net income of $150,000 for 2019 and $165,000 for 2020. Early in 2020, McLelland discovers that the December 31, 2019 ending inventory was overstated by $7,700. For simplicity, ignore taxes. Required: 1. What is the correct net income for 2019? For 2020? Net Income 2019 2020 2. Assuming the error was not corrected, what is the effect on the balance sheet at December 31, 2019? At December 31, 2020? December 31, 2019 December 31, 2020
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At December 31, 2020, Sandhill’s Mercantile has Cost of Goods Sold of $50800 before adjusting entries are recorded. The physical count of inventory indicates that the actual inventory amount is $1500 less than the balance in the Inventory account. What balance will the company report for Cost of Goods Sold on the 2020 income statement? $49300.$50800.$52300.$53800.
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The World Company's financial statements for 2019 and 2020 contain the following errors: 2020 2019 ending inventory $6,000 overstated $16,000 overstated insurance expense $4,000 understated $12,000 overstated If World Company uses the periodic inventory system and the proper correcting entries were made For other accounts, how much will 2020 operating income be overstated or understated? O $10,000 understated O $6,000 overstated O $10,000 overstated $6,000 understated
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Green Company overstated its inventory by $50 million at the end of 2021. The discovery of this error (in 2023), before adjusting or closing entries, would require: A. An increase of retained earnings in 2023 balance sheet. B. A debit to inventory of $50 million in 2023 balance sheet. C. the restatement of 2021 and 2022 fınancials D. none of the above O A O B