The following errors were discovered in the course of examination of the Kamuning Company's financial records: *Year 2020 wages payable for P34,000 was not recorded. *Accrued vacation pay for the year 2020 for P62,500 was not recorded because the bookkeeper "never learned that you had to do it". *Insurance for a 12-month period purchased on November 1, 2020 was charged to expense in the amount of P37,200 because "the amount of the check is about the same every year". What is the net effect of the above errors on the January 1, 2021 accumulated profits? A P127,500 over B P59,300 over P65,500 over D P96,500 over

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following errors were discovered in the course of examination of the Kamuning Company's financial records:
*Year 2020 wages payable for P34,000 was not recorded.
*Accrued vacation pay for the year 2020 for P62,500 was not recorded because the bookkeeper "never learned that you
had to do it".
*Insurance for a 12-month period purchased on November 1, 2020 was charged to expense in the amount of P37,200
because "the amount of the check is about the same every year".
What is the net effect of the above errors on the January 1, 2021 accumulated profits?
A P127,500 over
B P59,300 over
P65,500 over
P96,500 over
Transcribed Image Text:The following errors were discovered in the course of examination of the Kamuning Company's financial records: *Year 2020 wages payable for P34,000 was not recorded. *Accrued vacation pay for the year 2020 for P62,500 was not recorded because the bookkeeper "never learned that you had to do it". *Insurance for a 12-month period purchased on November 1, 2020 was charged to expense in the amount of P37,200 because "the amount of the check is about the same every year". What is the net effect of the above errors on the January 1, 2021 accumulated profits? A P127,500 over B P59,300 over P65,500 over P96,500 over
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