What is the effect of the foregoing errors on retained earnings at December 31, 2011?A. P 22,000 overstatedB. P 38,000 understatedC. P 67,000 overstatedD. P 82,000 overstated Robi Corporation reported profit for the years 2012 and 2011 at P700,000 and P550,000,respectively. Your audit of the company's accounts disclosed the need for adjustments as follows:20112012Overstatement of ending inventoriesdue to error in pricingOmission of depreciation on newly-acquired equipmentUnderstatement of Commission receivableP 29,000P 33,00015,00022,00015,00018,000A purchase of merchandise was not recordeduntil the following year, and also was notincluded in the ending inventory.60,000

Assets - treated as income so added to the net income except for beginning inventory because it will…

Answered: P 67,000 overstated D. P 82,000…

Business

Accounting

P 67,000 overstated D. P 82,000 overstat

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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Question

What is the effect of the foregoing errors on retained earnings at December 31, 2011?
A. P 22,000 overstated
B. P 38,000 understated
C. P 67,000 overstated
D. P 82,000 overstated

Robi Corporation reported profit for the years 2012 and 2011 at P700,000 and P550,000,
respectively. Your audit of the company's accounts disclosed the need for adjustments as follows:
2011
2012
Overstatement of ending inventories
due to error in pricing
Omission of depreciation on newly-
acquired equipment
Understatement of Commission receivable
P 29,000
P 33,000
15,000
22,000
15,000
18,000
A purchase of merchandise was not recorded
until the following year, and also was not
included in the ending inventory.
60,000

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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