If Soda Popinski's Company's ending inventory was actually $86,000 but was adjusted at year end to a balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?
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If Soda Popinski's Company's ending inventory was actually $86,000 but was adjusted at year end to a balance of $68,000 in error, what would be the impact on the presentation of the
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- Kari Downs, an auditor with Wheeler CPAS, is performing a review of Waterway Company's inventory account. Waterway did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year- end was $747,000. However, the following information was not considered when determining that amount. (a1) Prepare a schedule to determine the correct inventory amount. (If an amount reduces the account balance then enter with a negative sign preceding the number, e.g. -15,000, or parenthesis e.g. (15,000). Enter O if there is no effect.) 1. 2. 3. 4. 5. 6. Ending inventory-as reported Included in the company's count were goods with a cost of $257,000 that the company is holding on consignment. The goods belong to Kroeger Corporation. The physical count did not include goods purchased by Waterway with a cost of $35,000 that were shipped FOB destination on December 28 and did not arrive at Waterway warehouse until January 3.…The following is an independent error made by a company that uses the periodic inventory system: Equipment with a book value of $70,000 and a fair value of $100,000 was sold at the beginning of the year. A 2-year, non-interest-bearing note for $129,960 was received and recorded at its face value, and a gain of $59,960 was recognized. No interest revenue was recorded and 14% is a fair rate of interest. What is the journal entry needed to correct the sale of equipment? Ignore income taxesWhat is the journal entry adjustment needed to correct interest related to the note?Sheridan Inc. reported total assets of $2395000 and net income of $322000 for the current year. Sheridan determined that inventory was overstated by $23500 at the beginning of the year (this was not corrected). Ignoring income taxes, what is the corrected amount for total assets and net income for the year? $2371500 and $298500. $2395000 and $345500. $2418500 and $345500. $2395000 and $322000.
- income tax? Taking Inventory At the end of the last fiscal period, employees for Trans-Canada Distributors counted all merchandise on hand. However, a complete section of the warehouse was missed when the inventory was taken. The cost of the merchandise that was not included in the ending inventory figure was $7500. Questions 1. What effect has this error on the income statement and on the balance sheet this year? 2. If the error went undiscovered, would the net income in the second year be too high or too low? 3. Over the two-year period, what is the total error in the net income (assuming the second year's inventory is done correctly)? 4. Is the owner's equity total correct or incorrect in the second-year balance sheet? Explain your answer. ©P1. Swing Ltd uses FIFO for its inventory, which is valued at $21,000. It is considering a change to moving weighted average, which would change the valuation of inventory to $22,500. Which of the following would be decreased by the change? a. Cost of goods sold b. Sales c. Liabilities d. Withdrawals 2. Which of the following is NOT an accounting method that could be chosen by a company to increase reported profits in a particular year? a. Understating allowance for doubtful debts b. Classifying longer-term receivables as current assets c. Changing estimates of the useful life of plant and equipment d. Changing inventory valuation method 3. Which of the following statements about the use of the FIFO assumption is NOT true? a. The FIFO assumption assigns the more recent purchase costs to the balance sheet inventory asset account. b. The FIFO assumption is not affected by the inventory control method. c. In periods of rising prices it produces a higher profit than…The condensed statement of income of LUNA, Inc. for the year ended December 31, 2020 is presented below:LUNA, Inc.Statement of Income For the Year Ended December 31, 2020Sales P 1,000,000Cos of sales 600,000Gross income 400,000Operating expenses 150,000Net income P 250,000The December 31, 2020 audit of the company’s financial statements disclosed the following errors:a. December 31, 2020 inventory was understated by P31,000.b. Accrued expenses of P4,000 and prepaid expenses of P6,000 were not recognized in the company’s books.c. Sales of P5,000 were not recorded until January 2021, although the goods were shipped in December 2020 and were excluded from the December 31 physical inventory.d. Purchases of P30,000 made in December 2020, were not recorded although the goods were received and properly included in the December 31, physical inventory.e. A machine was sold for P10,000 on July 1, 2020 and the proceeds were credited to the Sales account. The machine was acquired on January 1,…
- At the beginning of the year Candle Co. has an inventory balance of $32,000. The company has net income for the year of $56,000. Later, the accountant discovers an error that caused the beginning invenotory to be understated by $6,000. a. Assuming no other changes, what is the correct net income for the year? b. If the error was discovered after year-end, what was the effect of the error on the balance sheet? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.During the year ended December 31, 2021, Angel Company revealed the following events: a) A counting error relating to inventory on December 31, 2020 was discovered. This required an increase in the carrying amount of inventory on that date of P500,000. b)It was also decided to write off P50,000 from inventory which was over two years old as it was obsolete. c) The provision for uncollectible accounts on December 31, 2020 was P200,000. During 2021, an amount of P300,000 was written off on the December 31, 2020 accounts receivable. What pretax adjustment is required to restate retained earnings on January 1, 2021?Kari Downs, an auditor with Wheeler CPAs, is performing a review of Sheridan Company's inventory account. Sheridan did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $731,000. However, the following information was not considered when determining that amount. (a1) Prepare a schedule to determine the correct inventory amount. (If an amount reduces the account balance then enter with a negative sign preceding the number, e.g. -15,000, or parenthesis e.g. (15,000). Enter 0 if there is no effect.) 1. Ending inventory-as reported Included in the company's count were goods with a cost of $250,000 that the company is holding on consignment. The goods belong to Kroeger Corporation. 2. The physical count did not include goods purchased by Sheridan with a cost of $31,000 that were shipped FOB destination on December 28 and did not arrive at Sheridan warehouse until January 3. 3. Included in the…
- During 20x3, Pryor Company changed its inventory method from the LIFO to FIFO. The beginning inventory under FIFO is $20,000 higher than under LIFO. Prepare the journal entry to record this accounting change. Ignore income tax.Zaheer Abbas, an auditor with Saeed CPAs, is performing a review of K Company’s inventory account. K Company did not have a good year and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $37,000. However, the following information was not considered when determining that amount.1. Included in the company’s count were goods with a cost of $125,000 that the company is holding on consignment. The goods belong to S Corporation. 2. The physical count did not include goods purchased by K Company with a cost of $20,000 that were shipped FOB destination on December 28 and did not arrive at K Company’s warehouse until January 3. 3. Included in the inventory account was $8,500 of office supplies that were stored in the warehouse and were to be used by the company’s supervisors and managers during the coming year. 4. The company received an order on December 29 that was boxed and was sitting on the loading dock awaiting…While examining the December 31, 2010 financial statements of Dawn Company, the following errors are discovered: Inventory at January 1 had been overstated by P50,000.; Inventory at December 31 was understated by P100,000.; During 2010, Dawn received a P200,000 cash advance from customer for merchandise to be manufactured and shipped during 2011. The collection was credited to sales revenue.; The net income reported on the 2010 income statement before reflecting any adjustments for the above items is P5,000,000. What is the corrected net income for the year ended December 31, 2010? Choices; 4,950,000 5,150,000 5,100,000 4,850,000
