None Effects of errors on financial statements The accountant for Healthy Life Consulting, a medical services consulting firm,mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($27,240) and (b) accrued wages ($6,940). Indicate the effect of each error, considered individually, on the income statement for the current year endedJuly 31. Also indicate the effect of each error on the July 31 balance sheet. Enter all amounts as positive numbers. Enter"0" in those spaces where there is no overstatement or no understatement. Error (b) The adjusting entry for accruedwages ($6,940) was omitted.

Error (a): Unearned Revenue Earned During the Year ($27,240)Income Statement Impact:Unearned revenue…

Answered: Effects of errors on financial…

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter14: Accounting For Uncollectible Accounts Receivable

Section14.1: Uncollectible Accounts Receivable

Problem 1OYO

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At year-end a trial balance prepared shows total credits exceed total debits by $855. This discrepancy could have been caused by a. An error in the general journal where an increase of $855 in accounts payable was recorded as a decrease of $855 in accounts payable. b. The ledger balance of accounts receivable was wrongly entered in the trial balance as 95 instead of $950. c. The ledger balance for accounts payable of $8,550 entered in the trial balance as $855. d. $855 increase in accounts receivable was recorded as a $855 increase in cash in general journal.
When preparing the financial statements for the year ended October 31, accrued salaries owed to employees for October 30 and 31 were omitted. The accrued salaries were included in the first salary payment in November. Indicate which items will be erroneously stated, because of failure to correct the initial error, on (a) the income statement for the month of November and (b) the balance sheet as of November 30.
Milan Company reported pretax income of P 6,500,000 on December 31, 2021. During your audit, the following errors were revealed: Insurance premium covering the period from July 1, 2021 to July 1, 2022, amounting to P 200,000 was paid and recorded as expense on July 31, 2021. The client did not make any adjustment at year end. Advertising for December 2021, amounting to P 500,000, was recorded when payment was made in January 2022. Merchandise worth P 1,000,000 was purchased in 2021 and included in ending inventory. However, the purchase was recorded only in 2022. On November 1, 2021, the P 300,000 was received representing rent of an equipment applicable for six months. Upon receipt, the entire amount was credited to income account. A merchandise valued at P 1,500,000 was properly recorded as purchase at year-end. Since the merchandise was still at the port area, it was inadvertently omitted from the inventory on December 31, 2021. What is the corrected pretax income for the year…
Milan Company reported pretax income of P 6,500,000 on December 31, 2021. During your audit, the following errors were revealed: Insurance premium covering the period from July 1, 2021 to July 1, 2022, amounting to P 200,000 was paid and recorded as expense on July 31, 2021. The client did not make any adjustment at year end. Advertising for December 2021, amounting to P 500,000, was recorded when payment was made in January 2022. Merchandise worth P 1,000,000 was purchased in 2021 and included in ending inventory. However, the purchase was recorded only in 2022. On November 1, 2021, the P 300,000 was received representing rent of an equipment applicable for six months. Upon receipt, the entire amount was credited to income account. A merchandise valued at P 1,500,000 was properly recorded as purchase at year-end. Since the merchandise was still at the port area, it was inadvertently omitted from the inventory on December 31, 2021. What is the corrected pretax income for the year…
At the end of the current year, using the aging of receivable method, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $375. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
Accrued salaries owed to employees for October 30 and 31 are not considered in preparing the financial statements for the year ended October 31. Indicate which items will be erroneously stated, because of the error, on (A) the income statement for the year and (B) the balance sheet as of October 31. Also indicate whether the items in error will be overstated or understated.
At the end of the current year, using the aging of receivable method, management estimated that $24,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a credit balance of $465. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment), and an analysis of accounts in the customers ledger indicates uncollectible receivables of $13,000. Which of the following entries records the proper adjusting entry for bad debt expense?
Providing for doubtful accounts At the end of the current year, the accounts receivable account has a debit balance of $1,923,000 and sales for the year total $26,920,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptions: a. The allowance account before adjustment has a debit balance of $13,100. Bad debt expense is estimated at 1/2 of 1% of sales. b. The allowance account before adjustment has a debit balance of $13,100. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $28,100. c. The allowance account before adjustment has a credit balance of $7,300. Bad debt expense is estimated at 1/4 of 1% of sales. d. The allowance account before adjustment has a credit balance of $7,300. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $60,600. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the…
At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $764. During the year, previously written off accounts of $140 are reinstated and accounts totaling $736 are written off as uncollectible. The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts should be?
Allowance for Doubtful Accounts has a credit balance of $670 at the end of the year (before adjustment), and an analysis of accounts in the customer ledger indicates the estimated amount of uncollectible accounts should be $16,220. Based on this estimate, which of the following adjusting entries should be made? Select the correct answer. debit Allowance for Doubtful Accounts, $670; credit Bad Debt Expense, $670 debit Bad Debt Expense, $670; credit Allowance for Doubtful Accounts, $670 debit Bad Debt Expense, $15,550; credit Allowance for Doubtful Accounts, $15,550 debit Allowance for Doubtful Accounts, $16,890; credit Bad Debt Expense, $16,890
After Bunker Hill Assay Services Inc. had completed all postings for March in the current year (20Y4), the sum of the balances in the following accounts payable ledger did not agree with the 36,600 balance of the controlling account in the general ledger: Assuming that the controlling account balance of 36,600 has been verified as correct, (a) determine the error(s) in the preceding accounts and (b) prepare a listing of accounts payable creditor balances (from the corrected accounts payable subsidiary ledger).

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