The December 31 year-end financial statements of Wiz Khalifa Company contained the following errors: December 31, 2016 December 31, 2017 40,500 overstated Ending inventory Depreciation expense 48,000 understated 11,500 understated An insurance premium of P330,000 was prepaid in 2016 covering the years 2016, 2017, and 2018. The entire amount was charged to expense in 2016. In addition, on December 31, 2017, a fully depreciated machinery was sold for P75,000 cash, but the sale was not recorded until 2018. There were no other errors during 2016 and 2017, and no corrections have been made for any of the errors. Ignore income tax effects.

The December 31 year-end financial statements of Wiz Khalifa Company contained the following errors: December 31, 2016 December 31, 2017 40,500 overstated Ending inventory Depreciation expense 48,000 understated 11,500 understated An insurance premium of P330,000 was prepaid in 2016 covering the years 2016, 2017, and 2018. The entire amount was charged to expense in 2016. In addition, on December 31, 2017, a fully depreciated machinery was sold for P75,000 cash, but the sale was not recorded until 2018. There were no other errors during 2016 and 2017, and no corrections have been made for any of the errors. Ignore income tax effects.

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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