During the year December 31, 2018, Samar Company revealed the following events: - A counting error relating to inventory on December 31, 2020 was discovered. This required a reduction in the carrying amount of inventory on that date of P2,000,000. - The provision for uncollectible accounts receivable on December 31, 2020 was P500,000. During 2021, an amount of P800,000 was written off the December 31, 2020 accounts receivable. REQUIRED: What pretax adjustment is required to restate retained earnings on January 1, 2021? a. 2,000,000 b. 2,500,000 c. 2,300,000 d. 0
During the year December 31, 2018, Samar Company revealed the following events: - A counting error relating to inventory on December 31, 2020 was discovered. This required a reduction in the carrying amount of inventory on that date of P2,000,000. - The provision for uncollectible accounts receivable on December 31, 2020 was P500,000. During 2021, an amount of P800,000 was written off the December 31, 2020 accounts receivable. REQUIRED: What pretax adjustment is required to restate retained earnings on January 1, 2021? a. 2,000,000 b. 2,500,000 c. 2,300,000 d. 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
During the year December 31, 2018, Samar Company revealed the following events:
- A counting error relating to inventory on December 31, 2020 was discovered. This
required a reduction in the carrying amount of inventory on that date of P2,000,000.
- The provision for uncollectible accounts receivable on December 31, 2020 was
P500,000. During 2021, an amount of P800,000 was written off the December 31,
2020 accounts receivable.
REQUIRED:
What pretax adjustment is required to restate retained earnings on January 1, 2021?
a. 2,000,000
b. 2,500,000
c. 2,300,000
d. 0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education