You have been engaged to examine the books and other records of Golden HarvestCorporation, which started its operations in 2020. Your examination disclosed thefollowing information:(1) Reported profit (loss) for the year:202020212022P(250,000)320,000380,000(2) The company during the three-year period failed to recognize accruals anddeferrals at yearend. The amounts omitted were as follows:Accrued expensesAccrued incomePrepaid expensesUnearned income2020P20,00032,00012,00015,0002021P25,00030,00018,00010,0002022P30,00026,00024,0008,000(3) Goods which were in transit at yearend were omitted from the physical count.These goods had been property recorded as purchases during the year:P28,00064,000End of 2021End of 2022(4) The company purchased a machine costing P80,000 on August 31, 2020.The amount was recorded as expense. The company depreciates all itsproperty, plant and equipment using the straight-line method, rounded tothe nearest month and disregarding residual values. This equipment had anestimated useful life of 8 years.(5) Dividends dedared at the end of 2021 and 2022 amounting to P60,000 andP100,000 respectively were recorded when paid in 2022 and 2023,respectively.(6) The Retained Eamings account is reproduced overleaf:Retained Earnings202020212022P(100,000)January 1 BalanceShare PremiumGain on Redemption of PreferenceSharesGain on Sale of Treasury Shares -OrdinaryDividends PaidProfit (loss) for the yearBalances, December 31P300,000P150,00030,00080,000(250,000)P(100,000)320,000P300,000(60,000)380,000P650,000REQUIRED:(a) Compute1.the correct profit (loss) for the years 2020, 2021 and 20222.the correct retained earnings balance at December 31, 2020,2021 and 2022.(b) Prepare audit adjusting entries in 2022.Scanned with CamScanner

Adjustment Entries The purpose of providing the adjustment entry in to make more viable financial…

Answered: REQUIRED: (a) Compute 1. the correct…

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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REQUIRED: (a) Compute 1. the correct profit (loss) for the years 2020, 2021 and 2022 the correct retained earnings balance at December 31, 2020, 2021 and 2022. 2. (b) Prepare audit adjusting entries in 2022.