Incredible and Joyful are partners who share profit on a 60:40 ratio. At the end of 2021, the partnership books showed a net income of P150,000. It was disclosed however that the following errors and omissions were noted (see image below). How much is the total effect of the above errors in the capital of the partnership?
Incredible and Joyful are partners who share profit on a 60:40 ratio. At the end of 2021, the partnership books showed a net income of P150,000. It was disclosed however that the following errors and omissions were noted (see image below). How much is the total effect of the above errors in the capital of the partnership?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Incredible and Joyful are partners who share profit on a 60:40 ratio. At the end of 2021, the partnership books showed a net income of P150,000. It was disclosed however that the following errors and omissions were noted (see image below).
How much is the total effect of the above errors in the capital of the partnership?
Transcribed Image Text:Accrued expense not recorded
Inventory understated
Advances from client recorded as
revenue
Unused supplies not taken up
Accrued revenue not recorded
Depreciation, understated
Depreciation overstated
2020
1,200
1,000
2,500
3,000
2021
3,000
5,000
3,500
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