Prepare correcting entries as of December 31, 2020 1. Depreciation computed on the building for the years 2018, 2019 and 2020 were overstated by P 12,000 per year. 2. Cost of the minor repair on the machinery of P 1,500, made on June 30, 2019, was charged to the machinery account. Machinery is being depreciated at an annual rate of 10%. 3. Unused office supplies as of December 31, 2019 of P 1,250 were overlooked. The company debits office supplies expense account upon purchase of supplies. 4. 3-year insurance premium of P 12,000 was paid on October 1, 2018. The amount was charged to insurance expense account and no adjustments for the unexpired premium had been taken up. 5. Merchandise purchased in 2019 of P 22,000, terms FOB shipping point, were taken up in the books when the goods were received in January 2020. These items were not included in the inventory count made on December 31, 2019. 6. Merchandise sold for P 45,000 was delivered in 2018 and were recorded in January 2020.
Prepare correcting entries as of December 31, 2020 1. Depreciation computed on the building for the years 2018, 2019 and 2020 were overstated by P 12,000 per year. 2. Cost of the minor repair on the machinery of P 1,500, made on June 30, 2019, was charged to the machinery account. Machinery is being depreciated at an annual rate of 10%. 3. Unused office supplies as of December 31, 2019 of P 1,250 were overlooked. The company debits office supplies expense account upon purchase of supplies. 4. 3-year insurance premium of P 12,000 was paid on October 1, 2018. The amount was charged to insurance expense account and no adjustments for the unexpired premium had been taken up. 5. Merchandise purchased in 2019 of P 22,000, terms FOB shipping point, were taken up in the books when the goods were received in January 2020. These items were not included in the inventory count made on December 31, 2019. 6. Merchandise sold for P 45,000 was delivered in 2018 and were recorded in January 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Prepare correcting entries as of December 31, 2020
1. Depreciation computed on the building for the years 2018, 2019 and 2020 were overstated by P
12,000 per year.
2. Cost of the minor repair on the machinery of P 1,500, made on June 30, 2019, was charged to the
machinery account. Machinery is being depreciated at an annual rate of 10%.
3. Unused office supplies as of December 31, 2019 of P 1,250 were overlooked. The company debits
office supplies expense account upon purchase of supplies.
4. 3-year insurance premium of P 12,000 was paid on October 1, 2018. The amount was charged to
insurance expense account and no adjustments for the unexpired premium had been taken up.
5. Merchandise purchased in 2019 of P 22,000, terms FOB shipping point, were taken up in the
books when the goods were received in January 2020. These items were not included in the
inventory count made on December 31, 2019.
6. Merchandise sold for P 45,000 was delivered in 2018 and were recorded in January 2020.
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