In fiscal year 2020, the company had formed an inventory impairment of 2000. In fiscal year 2021, the company considered that the required amount of accumulated impairment amounted to 1200 and thus reversed the difference in results. However, according to the documented opinion of the Chartered Accountant, the required amount of accumulated impairment in the year 2021 amounted to the amount of 2500. Based on the above if the amount of 2021 net worth is 15000, the actual net worth amount is 31/12/2021?

In fiscal year 2020, the company had formed an inventory impairment of 2000. In fiscal year 2021, the company considered that the required amount of accumulated impairment amounted to 1200 and thus reversed the difference in results. However, according to the documented opinion of the Chartered Accountant, the required amount of accumulated impairment in the year 2021 amounted to the amount of 2500. Based on the above if the amount of 2021 net worth is 15000, the actual net worth amount is 31/12/2021?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 14EA: If Wakowski Companys ending inventory was actually $86,000 but was adjusted at year end to a balance...

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In fiscal year 2020, the company had accumulated inventory impairment of 2000. In fiscal year 2021, the company considered that the required amount of accumulated impairment amounted to 1300 and thus reversed the difference in results. However, according to the Auditor, the required amount of accumulated impairment in the year 2021 amounted to 2500. If the amount of net profit of the income statement in 2021 is 20000, how much is the actual profit of the business?
Blossom Inc. is a calendar-year corporation. Its financial statements for the years 2022 and 2021 contained errors as follows: 2022 2021 Ending Inventory $9100 overstated $18100 overstated Depreciation Expense $6100 understated $13600 overstated O $7600 overstated O $15200 overstated O $10600 overstated O $3000 understated Assume that the proper correcting entries were made at December 31, 2021. By how much will 2022 income before taxes be overstated or understated?
When the records of ABC Corporation were reviewed at the close of 2021, the following errors were discovered. For each item, indicate by placing an X in the appropriate column(s) on the answer sheet whether the error resulted in an overstatement, an understatement, or had no effect on net income for the years 2020 and 2021. Item Failure to record amortization of patent in 2021. Failure to record the correct amount of ending 2020 inventory. The amount was understated because of an error in calculation. Failure to record merchandise purchased in 2020. Merchandise was also omitted from ending inventory in 2020 but was not yet sold. Failure to record accrued interest on notes payable in 2020; that amount was recorded when paid in 2021. Failure to reflect supplies on hand on balance sheet at end of 2020.
Sheffield, Inc. is a calendar-year corporation. Its financial statements for the years 2026 and 2025 contained errors as follows: Ending inventory Depreciation expense 2026 $15850 overstated $ 6500 overstated $3450 overstated $3450 understated. $9650 overstated $6200 understated 2025 $25000 overstated $18500 overstated Assume that the proper correcting entries were made at December 31, 2025. By how much will 2026 income before taxes be overstated or understated? Sheffield, Inc. is a calendar-year corporation. Its financial statements for the years 2026 and 2025 contained errors as follows: Ending inventory Depreciation expense 2026 $15850 overstated $6500 overstated $3450 overstated $3450 understated $9650 overstated $6200 understated 2025 $25000 overstated $18500 overstated Assume that the proper correcting entries were made at December 31, 2025, By how much will 2026 income before taxes be overstated or understated?
Bonita, Inc. is a calendar-year corporation. Its financial statements for the years 2021 and 2020 contained errors as follows: Ending inventory Depreciation expense O $6000 overstated O $15750 understated O O $6000 understated 2021 $0 $10200 overstated $5550 understated 2020 Assume that no correcting entries were made at December 31, 2020, or December 31, 2021 and that no additional errors occurred in 2022. Ignoring income taxes, by how much will working capital at December 31, 2022 be overstated or understated? $23500 overstated $17500 overstated
The before-tax income for Lonnie Holdiman Co. for 2020 was $101,000 and $77,400 for 2021. However, the accountant noted that the following errors had been made: 1. Sales for 2020 included amounts of $38,200 which had been received in cash during 2020, but for which the related products were delivered in 2021. Title did not pass to the purchaser until 2021. 2. The inventory on December 31, 2020, was understated by $8,640. 3. The bookkeeper in recording interest expense for both 2020 and 2021 on bonds payable made the following entry on an annual basis. Interest Expense 15,000 Cash 15,000 The bonds have a face value of $250,000 and pay a stated interest rate of 6%. They were issued at a discount of $15,000 on January 1, 2020, to yield an effective-interest rate of 7%. (Assume that the effective-yield method should be used.) 4. Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2020 and 2021. Repairs in the amount of…
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The before-tax income for Blossom Co. for 2020 was $98,000 and $80,800 for 2021. However, the accountant noted that the following errors had been made: 1. Sales for 2020 included amounts of $40,700 which had been received in cash during 2020, but for which the related products were delivered in 2021. Title did not pass to the purchaser until 2021. 2. The inventory on December 31, 2020, was understated by $8,100. 3. The bookkeeper in recording interest expense for both 2020 and 2021 on bonds payable made the following entry on an annual basis. Interest Expense 16,800 Cash 16,800 The bonds have a face value of $280,000 and pay a stated interest rate of 6%. They were issued at a discount of $16,000 on January 1, 2020, to yield an effective-interest rate of 7%. (Assume that the effective-yield method should be used.) 4. Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2020 and…
Marigold Inc. reported total assets of $2391000 and net income of $318000 for the current year. Marigold 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?
Sheffield Inc. reported total assets of $6407000 and net income of $505000 for the current year. Sheffield determined that inventory was understated by $138000 at the beginning of the year and $58300 at the end of the year. Ignoring income taxes, what is the corrected amount for total assets and net income for the year?
During the audit of BAC Company's 2029 financial statements, the auditors discovered that the 2029 ending inventory had been understated by $12,000 and that the 2029 beginning inventory was overstated by $9,000. Before the effect of these errors, 2029 pretax income had been computed as $115,000. What should be reported as the correct 2029 pretax income? A) $112,000 B) $94,000 C) $118,000 D) $136,000 E) $103,000
Vaughn Inc. reported total assets of $6407000 and net income of $505000 for the current year. Vaughn determined that inventory was understated by $140000 at the beginning of the year and $60800 at the end of the year. Ignoring income taxes, what is the corrected amount for total assets and net income for the year? $6407000 and $505000. $6467800 and $425800. $6467800 and $565800. $6346200 and $584200.