Problem 16-3 (AICPA Adapted) Atlanta Company reported net income for 2020 P4,000,000 and 2021 P5,000,000. An audit revealed certain errors. A collection of P100,000 from a customer was received on December 29, 2021 but not recorded until January 4, 2022 Supplier's invoice on account of P160,000 for inventory received in December 2021 was not recorded until January 2022. Inventories on December 31, 2020 and 2021 were correctly stated. Depreciation for 2020 was understated by P90,000. In September 2021, a P20,000 invoice for office supplies was charged to purchases. Office supplies are expensed when incurred. Sales on account of P300,000 in December 2021 were recorded in 2022. Required: a. Determine the correct net income for 2020 and 2021. b. Prepare adjusting entries on December 31 2021

Problem 16-3 (AICPA Adapted) Atlanta Company reported net income for 2020 P4,000,000 and 2021 P5,000,000. An audit revealed certain errors. A collection of P100,000 from a customer was received on December 29, 2021 but not recorded until January 4, 2022 Supplier's invoice on account of P160,000 for inventory received in December 2021 was not recorded until January 2022. Inventories on December 31, 2020 and 2021 were correctly stated. Depreciation for 2020 was understated by P90,000. In September 2021, a P20,000 invoice for office supplies was charged to purchases. Office supplies are expensed when incurred. Sales on account of P300,000 in December 2021 were recorded in 2022. Required: a. Determine the correct net income for 2020 and 2021. b. Prepare adjusting entries on December 31 2021

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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What is the adjusted balance of Accounts Payable on December 31,2021?
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