Green Trifle Bakery discovered some errors for 2020 and 2021. What would be the impacton net income for each year if the errors were left undetected?ErrorEnding inventory in 2020was overstated, butcorrectly counted in 2021.Depreciation expense wasincorrectly calculated in2020, resulting in $1,000 ofRent expense for 2020 wasnot accrued, and incorrectly [Select]recorded as an expensewhen paid in 2021.additional expenserecorded. It was correctlycalculated in 2021.Subscription revenue for2021 was incorrectlyrecorded as revenue when itwas received in 2020.2020Sales on accounts were notrecorded when made in2020, and recorded in 2021when cash was received.[Select][Select][Select][Select]V<2021[Select][Select][Select][Select][Select]><

Answered: Green Trifle Bakery discovered some…

Green Trifle Bakery discovered some errors for 2020 and 2021. What would be the impact on net income for each year if the errors were left undetected?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 11RE: At the end of 2019, Manny Company recorded its ending inventory at 350,000 based on a physical...

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Company Elmira reported the following cost of goods sold but later realized that an error had been made in ending inventory for year 2021. The correct inventory amount for 2021 was 32,000. Once the error is corrected, (a) how much is the restated cost of goods sold for 2021? and (b) how much is the restated cost of goods sold for 2022?
At the end of 2019, Manny Company recorded its ending inventory at 350,000 based on a physical count. During 2020, the company discovered that the correct inventory value at the end of 2019 should have been 400,000 because it made a counting error. Upon discovery of this error in 2020, what correcting journal entry will Manny make? Ignore income taxes.
Several errors are listed below. Indicate the effect each error would have on 2020 net income by selecting a plus sign (+), minus sign (-) or NI (no impact). Part (a) has been completed as an example. Effect on 2020Net Income a. Failed to record a 2020 expense. + b. Ending 2019 inventory is understated. c. Ending 2020 accrued expense is overstated. d. Ending 2020 inventory is overstated. e. Ending 2019 accrued revenue is understated. f. Ending 2020 prepaid expense is overstated. g. Ending 2019 unearned revenue is overstated. h. Ending 2020 accrued revenue was overstated. i. Ending 2019 prepaid expense was overstated. j. Ending 2019 accrued expense is overstated. k. Ending 2020 unearned revenue is understated.
Ignoring income taxes, what is the total effect of the errors on 2021 net income? ( Leave the numerical figure positive, put a dash then identify if OVERSTATED or UNDERSTATED, example: 25000-OVERSTATED)
(S) porins) An audit of Antwren revealed four errors that were made but never corrected. In 2021, ending inventory was overstated by $201, 000 and depreciation was overstated by $44,000. In 2022, nding inventory was understated by $111, 000 and wages expens as understated by $86, 000. What effect did these errors have 0 htwren's 2022 net income? (RE&CF 6) understated by $226, 000 overstated by $132, 000 pverstated by $157,000 inderstated by $25,000
During 2021, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts:2019 understated by $120,0002020 overstated by 150,000WMC uses the periodic inventory system and the FIFO cost method.Required:1. Determine the effect of these errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.)2. Prepare a journal entry to correct the error in 2021.3. Will WMC account for the error (a) retrospectively or (b) prospectively?
Bonghill Company’s December 31 year-end financial statements had the following error: December 31, 2019 December 31, 2020 Ending Inventory 13,500 understated 19,800 overstated Depreciation expense 3,600 understated - Unearned rental 5,000 understated - Prepaid insurance - 8,000 understated There were no other errors during the years 2019 or 2020 and no corrections have been made for any of the errors. (Ignore income tax considerations) What is the net effect of the errors in Bonghill’s December 31, 2020 accumulated profits balance?
During 2021, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts: 2019 understated by $ 142,000 2020 overstated by 194,000 WMC uses the periodic inventory system and the FIFO cost method. Required:1-a. Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.)1-b. Determine the effect of 2020 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.)2. Prepare a journal entry to correct the error in 2021.3. Will WMC account for the error (a) retrospectively or (b) prospectively? a. & b. are attached images c. & d. are below (they are short please please answer) c. Record correction of error journal entry form. d. Will WMC account for the error (a) retrospectively or (b) prospectively?
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
During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts: understated by overstated by $128,000 158,000 2019 2020 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, 2021, before any adjustments. (Ignore 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, 2021, before any adjustments. (Ignore income taxes.) Retained earnings would be Required 1 Required 2
Pow Corp. accidentally overstated its 2018 ending inventory by $750. Assume that ending 2019 inventory is accurately counted. The error in 2018 will have what effect on Pow Corp.? Oa. 2018 net income is understated by $750. Ob. 2018 net income is overstated by $750. Oc. 2019 net income is understated by $750. Od. Both b and c are correct.
During 2021, WMC Corporation discovered that its ending Inventories reported on Its financial statements were misstated by the following amounts: 2019 understated by 2020 overstated by WMC uses the periodic Inventory system and the FIFO cost method. Required: 1-a. Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore Income taxes.) 1-b. Determine the effect of 2020 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore Income taxes.) 2. Prepare a journal entry to correct the error in 2021. 3. Will WMC account for the error (a) retrospectively or (b) prospectively? Complete this question by entering your answers in the tabs below. Req 1A Req 18 Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.) (If the answers is no effect then select "No effect" in the dropdown.) 2019 Beginning inventory Plus: net purchases $146,000 202,000 Less:…