PROBLEM 1 (ERROR CORRECTION) Koshu Co., a calendar year entity, contained the following independent errors at the end of each reporting period: (Amounts in thousands) 2019 40 under 12 under 68 under 2020 50 under Accounts Payable Depreciation Expense Merchandise Inventory 2018 20 over 16 under 33 over 45 under 97 over Accrued Income 33 over 25 under Unearned Income 56 under 14 under 85 over 27 over 45 under Advances to Suppliers 105 under Advances from Customers 82 over 71 under 68 under 85 under Accounts Receivable Accrued Expense Prepaid Expense 92 over 78 under 27 under 19 over 18 under 12 under 17 over Compute for the following: a. Net adjustments on 2018 and 2020 Profits b. Effects of errors on the 2019 and 2020 Accumulated Profits c. Net adjustments to 2018 and 2019 Working Capital d. Adjusted total 2018 and 2020 Total Assets assuming unadjusted balances of total assets of 2018 and 2020 were P890 and P920, respectively e. Effects of errors on 2018 and 2019 Total Liabilities

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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PROBLEM 1 (ERROR CORRECTION)
Koshu Co., a calendar year entity, contained the following independent errors at the end of each
reporting period: (Amounts in thousands)
2020
50 under
2019
40 under
12 under
68 under
25 under
2018
Accounts Payable
Depreciation Expense
Merchandise Inventory
20 over
16 under
33 over
45 under
97 over
Accrued Income
33 over
56 under
Unearned Income
14 under
85 over
27 over
45 under
Advances to Suppliers
105 under
Advances from Customers
Accounts Receivable
Accrued Expense
Prepaid Expense
82 over
71 under
68 under
85 under
92 over
78 under
27 under
17 over
19 over
18 under
12 under
Compute for the following:
a. Net adjustments on 2018 and 2020 Profits
b. Effects of errors on the 2019 and 2020 Accumulated Profits
c. Net adjustments to 2018 and 2019 Working Capital
d. Adjusted total 2018 and 2020 Total Assets assuming unadjusted balances of total assets
of 2018 and 2020 were P890 and P920, respectively
e. Effects of errors on 2018 and 2019 Total Liabilities
Transcribed Image Text:PROBLEM 1 (ERROR CORRECTION) Koshu Co., a calendar year entity, contained the following independent errors at the end of each reporting period: (Amounts in thousands) 2020 50 under 2019 40 under 12 under 68 under 25 under 2018 Accounts Payable Depreciation Expense Merchandise Inventory 20 over 16 under 33 over 45 under 97 over Accrued Income 33 over 56 under Unearned Income 14 under 85 over 27 over 45 under Advances to Suppliers 105 under Advances from Customers Accounts Receivable Accrued Expense Prepaid Expense 82 over 71 under 68 under 85 under 92 over 78 under 27 under 17 over 19 over 18 under 12 under Compute for the following: a. Net adjustments on 2018 and 2020 Profits b. Effects of errors on the 2019 and 2020 Accumulated Profits c. Net adjustments to 2018 and 2019 Working Capital d. Adjusted total 2018 and 2020 Total Assets assuming unadjusted balances of total assets of 2018 and 2020 were P890 and P920, respectively e. Effects of errors on 2018 and 2019 Total Liabilities
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