The accounting staff of STUVWXYZ Company made the following entries in recognizing transactions of 2022: A. Understated the ending inventory at year-end by P955,000 B. Depreciation expense was overstated by P45,000 c. Advanced one-year subscriptions for Heroes Magazine received was fully recorded to subscription income, P360,000 beginning May 1, 2022. The company failed to pass appropriate adjustments on December 31, 2022 D. Accrued salaries for year-end, 2022 amounting to P822,000 was recorded only in January, 2023. No booking was done in 2022 for this accrual E. Purchase Discount for the year was overstated by P377,000. F. The company paid one-yearservice contract to an engineering firm for P420,000 to service the production equipment effective June 1, 2022. The payment was lodged as Prepaid Expense. The company failed to pass any adjusting entry for three years. Other information a. Following balances were extracted from the financial statements of STUVWXYZ Company: 2022 2023 Net Income 12,528,000 14,790,000 44,210,000 Retained Earnings 35,415,000 Requirement: Based on the foregoing transactions, determine the adjusted balances of: 1. Netincome for 2022 and 2023 2. Retained Earnings for 2022 and 2023 For uniformity in solution, use this suggested format:
The accounting staff of STUVWXYZ Company made the following entries in recognizing transactions of 2022: A. Understated the ending inventory at year-end by P955,000 B. Depreciation expense was overstated by P45,000 c. Advanced one-year subscriptions for Heroes Magazine received was fully recorded to subscription income, P360,000 beginning May 1, 2022. The company failed to pass appropriate adjustments on December 31, 2022 D. Accrued salaries for year-end, 2022 amounting to P822,000 was recorded only in January, 2023. No booking was done in 2022 for this accrual E. Purchase Discount for the year was overstated by P377,000. F. The company paid one-yearservice contract to an engineering firm for P420,000 to service the production equipment effective June 1, 2022. The payment was lodged as Prepaid Expense. The company failed to pass any adjusting entry for three years. Other information a. Following balances were extracted from the financial statements of STUVWXYZ Company: 2022 2023 Net Income 12,528,000 14,790,000 44,210,000 Retained Earnings 35,415,000 Requirement: Based on the foregoing transactions, determine the adjusted balances of: 1. Netincome for 2022 and 2023 2. Retained Earnings for 2022 and 2023 For uniformity in solution, use this suggested format:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:For uniformity in solution, use this suggested format:
2.0 2 2
20 2 3
Net
Retained
Net
Retained
Items
Income
Earnings
Income
Earning
Unadjusted
Balance
XX
XX
XX
A
XX
XX
XX
XX
В
XX
XX
XX
XX
Transcribed Image Text:The accounting staff of STUVWXYZ Company made the following entries in recognizing transactions of
2022:
A. Understated the ending inventory at year-end by P955,000
B. Depreciation expense was overstated by P45,000
c. Advanced one-year subscriptions for Heroes Magazine received was fully recorded to
subscription income, P360,000 beginning May 1, 2022. The company failed to pass appropriate
adjustments on December 31, 2022
D. Accrued salaries for year-end, 2022 amounting to P822,000 was recorded only in January, 2023.
No booking was done in 2022 for this accrual
E. Purchase Discount for the year was overstated by P377,000.
F. The company paid one-yearservice contract to an engineering firm for P420,000 to service the
production equipment effective June 1, 2022. The payment was lodged as Prepaid Expense. The
company failed to pass any adjusting entry forthree years.
Otherinformation
a. Following balances were extracted from the financial statements of STUVWXYZ Company:
2022
2023
Net Income
12,528,000
14,790,000
Retained Earnings
35,415,000
44,210,000
Requirement: Based on the foregoing transactions, determine the adjusted balances of:
1. Netincome for 2022 and 2023
2. Retained Earnings for 2022 and 2023
For uniformity in solution, use this suggested format:
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