If the errors were discovered in January 2018, what must be the entry to adjust 2017 Net Income/Retained Earnings assuming the books in 2017 are already closed? (Show your solutions, including the adjusting journal entry, in your attached working paper but just put the total debits/credits in the google form). * Upon inspection of the records of Ally Company, the following facts were discovered for the year ended December 31, 2017. A fire insurance premium of 120,000 was paid and charged as insurance expense for 2017. The fire insurance policy covers one year from April 1, 2017. Inventory on January 1, 2017 was overstated by 80,000. Inventory on December 31, 2017 was overstated by 120,000. Taxes of 60,000 for the fourth quarter of 2017 were paid on January 20, 2018 and charged as expense of 2018. On December 5, 2017 a cash advance of 90,000 by a customer was received for goods to be delivered in January 2018. The amount of 90,000 was credited to sales. The gross profit on sales is 40%. Net income for the year before any adjustments is 1,550,000. Your answer
If the errors were discovered in January 2018, what must be the entry to adjust 2017 Net Income/Retained Earnings assuming the books in 2017 are already closed? (Show your solutions, including the adjusting journal entry, in your attached working paper but just put the total debits/credits in the google form). * Upon inspection of the records of Ally Company, the following facts were discovered for the year ended December 31, 2017. A fire insurance premium of 120,000 was paid and charged as insurance expense for 2017. The fire insurance policy covers one year from April 1, 2017. Inventory on January 1, 2017 was overstated by 80,000. Inventory on December 31, 2017 was overstated by 120,000. Taxes of 60,000 for the fourth quarter of 2017 were paid on January 20, 2018 and charged as expense of 2018. On December 5, 2017 a cash advance of 90,000 by a customer was received for goods to be delivered in January 2018. The amount of 90,000 was credited to sales. The gross profit on sales is 40%. Net income for the year before any adjustments is 1,550,000. Your answer
Chapter1: Financial Statements And Business Decisions
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What must be the entry to adjust 2017 Net Income/
Transcribed Image Text:Your answer
If the errors were discovered in January 2018, what must be the entry to adjust 2017 Net
Income/Retained Earnings assuming the books in 2017 are already closed? (Show your
solutions, including the adjusting journal entry, in your attached working paper but just put the
total debits/credits in the google form). *
Upon inspection of the records of Ally Company, the following facts were discovered for the
year ended December 31, 2017. A fire insurance premium of 120,000 wwas paid and charged as
insurance expense for 2017. The fire insurance policy covers one year from April1, 2017.
Inventory on January 1, 2017 was overstated by 80,000. Inventory on December 31, 2017
was overstated by 120,000. Taxes of 60,000 for the fourth quarter of 2017 were paid on January 20,
2018 and charged as expense of 2018.
On December 5, 2017 a cash advance of 90,000 by a customer was received for goods to be
delivered in January 2018. The amount of 90,000 was credited to sales. The gross profit on sales is
40%. Net income for the year before any adjustments is 1,550,000.
Your answer
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