4. What amount should be reported as adjusted net income for 2019? 5. What amount should be reported as adjusted earnings on December 31, 2019? Bexley Company is in the process of adjusting the books at the end of 2019. The accountingrecords revealed the following information:The entity failed to accrue sales commissions at the end of 2017 and 2018.2017220,0002018140,000In each case, the sales commissions were paid and expensed in January of the followingyear.Errors in ending inventory for the last three years:2017400,000 understated2018540,000 overstated2019150,000 understatedThe unadjusted retained earnings balance on January 1, 2019 is P12,600,000 and theunadjusted net income for 2019 was P3,000,000.Dividends of P1,750,000 were declared during 2019.

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unt should be reported as adjusted net income for 2019? 5. What amount should b

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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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

4. What amount should be reported as adjusted net income for 2019?

5. What amount should be reported as adjusted earnings on December 31, 2019?

Bexley Company is in the process of adjusting the books at the end of 2019. The accounting
records revealed the following information:
The entity failed to accrue sales commissions at the end of 2017 and 2018.
2017
220,000
2018
140,000
In each case, the sales commissions were paid and expensed in January of the following
year.
Errors in ending inventory for the last three years:
2017
400,000 understated
2018
540,000 overstated
2019
150,000 understated
The unadjusted retained earnings balance on January 1, 2019 is P12,600,000 and the
unadjusted net income for 2019 was P3,000,000.
Dividends of P1,750,000 were declared during 2019.

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