CASH TO ACCRUAL, SINGLE ENTRY AND CORRECTION OF ERRORS 1. The results of your audit of Heave Company for 2 consecutive years are shown below:a. Net income for 2018 and 2019 are P46, 520 and P51, 230 respectively.b. Equipment worth P6, o00 purchased on 2018 was charged to expense. Theequipment has a useful life of 10 years.c. In 2017, merchandise inventory was understated by P5, o00 and was overstatedby P3, 000 in 2019.d. Inventory purchased on account was not recorded in 2018 and included asinventory only on 2019.e. P4, 000 worth of accrued taxes were not recorded in 2018.f. Unearned rent received was taken up as income amounted to P2, o00.Requirement:a. The adjusted net income for 2018 and 2019.2. Vertical Company has determined its 2019 and 2018 net income to be P115, 000 andP110, 000, respectively. After conducting your audit, you found out the following:a. Loss on the sale of plant asset in 2019 was credited to the retained earningsaccount. The loss amounted to P12, 000.b. Cash received in advance for rendering services amounting to P25, o0o wascredited to a revenue account when received. Based from findings, P6,000 wasearned in 2018, P10,000 was earned in 2019 and the remainder will be earnedin 2020.c. Ending inventory was understated by P5, 000 in 2018 and overstated by P15,000 in 2019.Requirement:a. The adjusted net income for 2018 and 2019..

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The results of your audit of Heave Company for 2 consecutive years are shown below: a. Net income for 2018 and 2019 are P46, 520 and P51, 230 respectively. b. Equipment worth P6, o00 purchased on 2018 was charged to expense. The equipment has a useful life of 10 years. c. In 2017, merchandise inventory was understated by P5, o00 and was overstated by P3, 000 in 2019. d. Inventory purchased on account was not recorded in 2018 and included as inventory only on 2019. e. P4, 000 worth of accrued taxes were not recorded in 2018. Unearned rent received was taken up as income amounted to P2, 000. f. Requirement: a. The adjusted net income for 2018 and 2019.

The results of your audit of Heave Company for 2 consecutive years are shown below: a. Net income for 2018 and 2019 are P46, 520 and P51, 230 respectively. b. Equipment worth P6, o00 purchased on 2018 was charged to expense. The equipment has a useful life of 10 years. c. In 2017, merchandise inventory was understated by P5, o00 and was overstated by P3, 000 in 2019. d. Inventory purchased on account was not recorded in 2018 and included as inventory only on 2019. e. P4, 000 worth of accrued taxes were not recorded in 2018. Unearned rent received was taken up as income amounted to P2, 000. f. Requirement: a. The adjusted net income for 2018 and 2019.

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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