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Net income Working capital RE, end of the yea estions: above

Net income Working capital RE, end of the yea estions: above

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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PROBLEM 6-3 Counterbalancing Errors Phcovered the following errors in connection with your examination of the eancial statements of Girlie Corporation: Purchase of merchandise on account on December 27, 2020 amounting to PS0,000 was not recorded until it was paid in January 2021. The merchandise was properly included in the ending inventory in 2020. 9 Sale of merchandise on account on December 29, 2020 amounting to P70,000 was not recorded until it was collected in January 2021. The merchandise was properly excluded in the ending inventory in 2020. 1 On December 31, 2020, the ending inventory was understated by P20,000. The following data were extracted from the financial statements of Girlie Corporation: 2020 2021 Net income Working capital RE, end of the year 100,000 300,000 100,000 150,000 400,000 250,000 Questions: Based on the above data, determine the following: 1. Net income in 2020 a. P140,000 b. P70,000 c. P50,000 d. P120,000 2 Working capital, end of 2020 a. P340,000 b. P320,000 c. P390,000 d. P250,000 3. Retained earnings, end of 2020 a. P140,000 b. P70,000 c. P50,000 d. P120,000 4. Net income in 2021 a. P110,000 b. P120,000 c. P130,000 d. P140,000 5. Working capital, end of 2021 a. P420,000 b. P400,000 c. P450,000 d. P330,000 6. Retained earnings, end of 2021 a. P250,000 b. Р300,000 c. P230,000 d. P180,000 7. Prepare adjusting entries assuming errors were discovered in (a) 2020, (b) 2021, and (c) 2022.
Transcribed Image Text:PROBLEM 6-3 Counterbalancing Errors Phcovered the following errors in connection with your examination of the eancial statements of Girlie Corporation: Purchase of merchandise on account on December 27, 2020 amounting to PS0,000 was not recorded until it was paid in January 2021. The merchandise was properly included in the ending inventory in 2020. 9 Sale of merchandise on account on December 29, 2020 amounting to P70,000 was not recorded until it was collected in January 2021. The merchandise was properly excluded in the ending inventory in 2020. 1 On December 31, 2020, the ending inventory was understated by P20,000. The following data were extracted from the financial statements of Girlie Corporation: 2020 2021 Net income Working capital RE, end of the year 100,000 300,000 100,000 150,000 400,000 250,000 Questions: Based on the above data, determine the following: 1. Net income in 2020 a. P140,000 b. P70,000 c. P50,000 d. P120,000 2 Working capital, end of 2020 a. P340,000 b. P320,000 c. P390,000 d. P250,000 3. Retained earnings, end of 2020 a. P140,000 b. P70,000 c. P50,000 d. P120,000 4. Net income in 2021 a. P110,000 b. P120,000 c. P130,000 d. P140,000 5. Working capital, end of 2021 a. P420,000 b. P400,000 c. P450,000 d. P330,000 6. Retained earnings, end of 2021 a. P250,000 b. Р300,000 c. P230,000 d. P180,000 7. Prepare adjusting entries assuming errors were discovered in (a) 2020, (b) 2021, and (c) 2022.
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