The before-tax income for Bramble Co. for 2020 was $90,000 and $73,100 for 2021. However, the accountant noted that the following errors had been made: 2 E Sales for 2020 included amounts of $41,300 which had been received in cash during 2020, but for which the related products were delivered in 2021. Title did not pass to the purchaser until 2021. The inventory on December 31, 2020, was understated by $7,900. The bookkeeper in recording interest expense for both 2020 and 2021 on bonds payable made the following entry on an annual basis. Interest Expense 15,000 Cash 15,000 The bonds have a face value of $250,000 and pay a stated interest rate of 696. They were issued at a discount of $14,000 an January 1, 2020, to yield an effective-interest rate of 7%. (Assume that the effective-yield method should be used.) 4. Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2020 and 2021. Repairs in the amount of $8,500 in 2020 and $9,800 in 2021 were so charged. The company applies a rate of 10% to the balance in the Equipment account at the end of the year in its determination of depreciation charges. Prepare a schedule showing the determination of corrected income before taxes for 2020 and 2021. (Enter negative amounts using either a negative sign preceding the number eg-15,000 or parentheses ep (15,000). Round answers to O decimal places, eg. 125.) Income Before Tax Corrections: Corrected Income Before Tax > 5 2020 S 2021
The before-tax income for Bramble Co. for 2020 was $90,000 and $73,100 for 2021. However, the accountant noted that the following errors had been made: 2 E Sales for 2020 included amounts of $41,300 which had been received in cash during 2020, but for which the related products were delivered in 2021. Title did not pass to the purchaser until 2021. The inventory on December 31, 2020, was understated by $7,900. The bookkeeper in recording interest expense for both 2020 and 2021 on bonds payable made the following entry on an annual basis. Interest Expense 15,000 Cash 15,000 The bonds have a face value of $250,000 and pay a stated interest rate of 696. They were issued at a discount of $14,000 an January 1, 2020, to yield an effective-interest rate of 7%. (Assume that the effective-yield method should be used.) 4. Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2020 and 2021. Repairs in the amount of $8,500 in 2020 and $9,800 in 2021 were so charged. The company applies a rate of 10% to the balance in the Equipment account at the end of the year in its determination of depreciation charges. Prepare a schedule showing the determination of corrected income before taxes for 2020 and 2021. (Enter negative amounts using either a negative sign preceding the number eg-15,000 or parentheses ep (15,000). Round answers to O decimal places, eg. 125.) Income Before Tax Corrections: Corrected Income Before Tax > 5 2020 S 2021
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 2RE: Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of...
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Transcribed Image Text:The before-tax income for Bramble Co. for 2020 was $90,000 and $73,100 for 2021. However, the accountant noted that the
following errors had been made:
2
E
Sales for 2020 included amounts of $41,300 which had been received in cash during 2020, but for which the related products
were delivered in 2021. Title did not pass to the purchaser until 2021.
The inventory on December 31, 2020, was understated by $7,900.
The bookkeeper in recording interest expense for both 2020 and 2021 on bonds payable made the following entry on an
annual basis.
Interest Expense 15,000
Cash
15,000
The bonds have a face value of $250,000 and pay a stated interest rate of 696. They were issued at a discount of $14,000 an
January 1, 2020, to yield an effective-interest rate of 7%. (Assume that the effective-yield method should be used.)
4.
Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2020 and 2021. Repairs in
the amount of $8,500 in 2020 and $9,800 in 2021 were so charged. The company applies a rate of 10% to the balance in the
Equipment account at the end of the year in its determination of depreciation charges.
Prepare a schedule showing the determination of corrected income before taxes for 2020 and 2021. (Enter negative amounts using
either a negative sign preceding the number eg-15,000 or parentheses ep (15,000). Round answers to O decimal places, eg. 125.)
Income Before Tax
Corrections:
Corrected Income Before Tax
>
5
2020
S
2021
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