During the course of an audit of the financial statements of Julie Company for the yearended December 31, 2019, the following data are discovered: Inventory on January 1, 2019 had been overstated by P300,000. Inventory on December 31, 2019 was understated by P500,000. An insurance policy covering three years had been purchased on January 1, 2018for P150,000. The entire amount was charged as an expense in 2018. During 2019, the entity received a P100,000 cash advance from a customer formerchandise to be manufactured and shipped during 2020. The amount had beencredited to sales revenue. The gross profit on sales is 50%.Net income for 2019 per book was P2,000,000. What is the proper net income for 2019?
During the course of an audit of the financial statements of Julie Company for the yearended December 31, 2019, the following data are discovered: Inventory on January 1, 2019 had been overstated by P300,000. Inventory on December 31, 2019 was understated by P500,000. An insurance policy covering three years had been purchased on January 1, 2018for P150,000. The entire amount was charged as an expense in 2018. During 2019, the entity received a P100,000 cash advance from a customer formerchandise to be manufactured and shipped during 2020. The amount had beencredited to sales revenue. The gross profit on sales is 50%.Net income for 2019 per book was P2,000,000. What is the proper net income for 2019?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
During the course of an audit of the financial statements of Julie Company for the yearended December 31, 2019, the following data are discovered:
Inventory on January 1, 2019 had been overstated by P300,000.
Inventory on December 31, 2019 was understated by P500,000.
An insurance policy covering three years had been purchased on January 1, 2018for P150,000. The entire amount was charged as an expense in 2018.
During 2019, the entity received a P100,000 cash advance from a customer formerchandise to be manufactured and shipped during 2020. The amount had beencredited to sales revenue. The gross profit on sales is 50%.Net income for 2019 per book was P2,000,000.
What is the proper net income for 2019?
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