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Shockley Co. reported the following amounts in its financial statements: (a) Cost of goods sold (b) Profit a (c) Total current assets (d) Equity In making the physical counts of inventory, the following errors were made: • Inventory on December 31, 2020: understated $71,000 • Inventory on December 31, 2021: overstated $31,000 Cost of goods sold Reported Adjustments Dec 31, 2020 error Dec 31, 2021 error Corrected Required: For each of the preceding financial statement items-(a), (b), (c), and (d)-prepare a schedule similar to the following and show the adjustments that would have been necessary to correct the reported amounts. (Negative answers should be indicated by a min- sign.) b. Profit $ Reported 2020 Financial Statements for Year Ended December 31. 2020 2021 720,000 $ 852,000 $ 225,000 280,000 1,165,000 1,275,000 1,110,000 1,297,000 1,440,000 1,242,000 $ 720,000 $ 2021 852,000 $ 720,000 $ 335.000 e 2022 775,000 2022 775,000 236,000 852,000 $ 775,000 390.000 336.000

Shockley Co. reported the following amounts in its financial statements: (a) Cost of goods sold (b) Profit a (c) Total current assets (d) Equity In making the physical counts of inventory, the following errors were made: • Inventory on December 31, 2020: understated $71,000 • Inventory on December 31, 2021: overstated $31,000 Cost of goods sold Reported Adjustments Dec 31, 2020 error Dec 31, 2021 error Corrected Required: For each of the preceding financial statement items-(a), (b), (c), and (d)-prepare a schedule similar to the following and show the adjustments that would have been necessary to correct the reported amounts. (Negative answers should be indicated by a min- sign.) b. Profit $ Reported 2020 Financial Statements for Year Ended December 31. 2020 2021 720,000 $ 852,000 $ 225,000 280,000 1,165,000 1,275,000 1,110,000 1,297,000 1,440,000 1,242,000 $ 720,000 $ 2021 852,000 $ 720,000 $ 335.000 e 2022 775,000 2022 775,000 236,000 852,000 $ 775,000 390.000 336.000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Shockley Co. reported the following amounts in its financial statements: (a) Cost of goods sold (b) Profit a (c) Total current assets (d) Equity In making the physical counts of inventory, the following errors were made: • Inventory on December 31, 2020: understated $71,000 • Inventory on December 31, 2021: overstated $31,000 Cost of goods sold Reported Adjustments Dec 31, 2020 error Dec 31, 2021 error b. Required: For each of the preceding financial statement items-(a). (b), (c), and (d)-prepare a schedule similar to the following and show the adjustments that would have been necessary to correct the reported amounts. (Negative answers should be indicated by a minus sign.) Corrected Profit $ Corrected $ 2020 Reported Adjustments: Dec 31, 2020 error Dec. 31, 2021 error Financial Statements for Year Ended December 31. 2020 2021 720,000 $ 852,000 $ 225,000 280,000 1,165,000 1,275,000 1,110,000 1,297,000 1,440,000 1,242,000 720,000 $ $ 2021 852,000 $ 720,000 $ 225,000 $ 225,000 $ 2022 2022 775,000 236,000 775,000 852,000 $ 775,000 280,000 $ 236,000 280,000 $ 236,000
Transcribed Image Text:Shockley Co. reported the following amounts in its financial statements: (a) Cost of goods sold (b) Profit a (c) Total current assets (d) Equity In making the physical counts of inventory, the following errors were made: • Inventory on December 31, 2020: understated $71,000 • Inventory on December 31, 2021: overstated $31,000 Cost of goods sold Reported Adjustments Dec 31, 2020 error Dec 31, 2021 error b. Required: For each of the preceding financial statement items-(a). (b), (c), and (d)-prepare a schedule similar to the following and show the adjustments that would have been necessary to correct the reported amounts. (Negative answers should be indicated by a minus sign.) Corrected Profit $ Corrected $ 2020 Reported Adjustments: Dec 31, 2020 error Dec. 31, 2021 error Financial Statements for Year Ended December 31. 2020 2021 720,000 $ 852,000 $ 225,000 280,000 1,165,000 1,275,000 1,110,000 1,297,000 1,440,000 1,242,000 720,000 $ $ 2021 852,000 $ 720,000 $ 225,000 $ 225,000 $ 2022 2022 775,000 236,000 775,000 852,000 $ 775,000 280,000 $ 236,000 280,000 $ 236,000
b C. d Corrected Profit Reported Adjustments Dec 31, 2020 error Dec 31, 2021 error Corrected Total current assets. Reported Adjustments Dec 31, 2020 error Dec 31, 2021 error Corrected Equity Reported Adjustments: Dec. 31, 2020 error Dec 31, 2021 error Corrected S S 720,000 $ 852,000 $ 225,000 $ 280,000 $ 775,000 236,000 225,000 $ 280,000 $ 236,000 $ 1,165,000 $1,275,000 $ 1,110,000 $ 1,165,000 $ 1,275,000 $ 1,110,000 $ 1,297,000 $1,440,000 $ 1,242,000 $ 1,297,000 $1,440,000 $ 1,242,000
Transcribed Image Text:b C. d Corrected Profit Reported Adjustments Dec 31, 2020 error Dec 31, 2021 error Corrected Total current assets. Reported Adjustments Dec 31, 2020 error Dec 31, 2021 error Corrected Equity Reported Adjustments: Dec. 31, 2020 error Dec 31, 2021 error Corrected S S 720,000 $ 852,000 $ 225,000 $ 280,000 $ 775,000 236,000 225,000 $ 280,000 $ 236,000 $ 1,165,000 $1,275,000 $ 1,110,000 $ 1,165,000 $ 1,275,000 $ 1,110,000 $ 1,297,000 $1,440,000 $ 1,242,000 $ 1,297,000 $1,440,000 $ 1,242,000
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