Subject - account Please help me.Thankyou. No. Account Titles and Explanation1.2.3.4.DebitCredit Stellar Company is in the process of adjusting and correcting its books at the end of 2020. In reviewing its records, the followinginformation is compiled.1. Stellar has failed to accrue sales commissions payable at the end of each of the last 2 years, as follows.December 31, 2019December 31, 20203.2.In reviewing the December 31, 2020, inventory, Stellar discovered errors in its inventory-taking procedures that have causedinventories for the last 3 years to be incorrect, as follows.December 31, 2018December 31, 2019December 31, 2020$3,300$2,300UnderstatedPrior to 2020UnderstatedStellar has already made an entry that established the incorrect December 31, 2020, inventory amount.3.At December 31, 2020, Stellar decided to change the depreciation method on its office equipment from double-declining-Stellar has already made an entry that established the incorrect December 31, 2020, inventory amount.2020Overstated$16,700$19,000$6,000At December 31, 2020, Stellar decided to change the depreciation method on its office equipment from double-declining-balance to straight-line. The equipment had an original cost of $90,000 when purchased on January 1, 2018. It has a 10-yearuseful life and no salvage value. Depreciation expense recorded prior to 2020 under the double-declining-balance methodwas $39,600. Stellar has already recorded 2020 depreciation expense of $11,600 using the double-declining-balancemethod.Before 2020, Stellar accounted for its income from long-term construction contracts on the completed-contract basis. Earlyin 2020, Stellar changed to the percentage-of-completion basis for accounting purposes. It continues to use the completed-contract method for tax purposes. Income for 2020 has been recorded using the percentage-of-completion method. Thefollowing information is available.Pretax IncomePercentage-of-Completion$141,70057,500Completed-Contract$94.90021,600Prepare the journal entries necessary at December 31, 2020, to record the above corrections and changes. The books are still open for2020. The income tax rate is 20%. Stellar has not yet recorded its 2020 income tax expense and payable amounts so current-year taxeffects may be ignored. Prior-year tax effects must be considered in item 4. (Credit account titles are automatically indented whenamount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for theamounts)

Prior period errors are the errors that belong to the previous years but are found in the current…

Prepare the journal entries necessary at December 31, 2020, to record the above corrections and changes. The books are still open for 2020. The income tax rate is 20%. Stellar has not yet recorded its 2020 income tax expense and payable amounts so current-year tax effects may be ignored. Prior-year tax effects must be considered in item 4. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts)

Prepare the journal entries necessary at December 31, 2020, to record the above corrections and changes. The books are still open for 2020. The income tax rate is 20%. Stellar has not yet recorded its 2020 income tax expense and payable amounts so current-year tax effects may be ignored. Prior-year tax effects must be considered in item 4. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts)

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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