Use the following information for the next four questions: GULOSITY GREEDINESS Co. reported profits of P4,000,000 and P8,000,000 in 20x1 and 20x2, respectively. In 20x3, the following prior period errors were discovered: • The inventory on December 31, 20x1 was understated by P200,000. • An equipment with an acquisition cost of P1,200,000 was erroneously charged as expense in 20x1. The equipment has an estimated useful life of 5 years with no residual value. GULOSITY Co. provides full year depreciation in the year of acquisition. The unadjusted balances of retained earnings are P8,800,000 and P16,800,000 as of December 31, 20x1 and 20x2, respectively. 7. How much is the correct profit in 20x1? a. 7,560,000 c. 4,760,000 d. 5,160,000 b. 5,610,000

Use the following information for the next four questions: GULOSITY GREEDINESS Co. reported profits of P4,000,000 and P8,000,000 in 20x1 and 20x2, respectively. In 20x3, the following prior period errors were discovered: • The inventory on December 31, 20x1 was understated by P200,000. • An equipment with an acquisition cost of P1,200,000 was erroneously charged as expense in 20x1. The equipment has an estimated useful life of 5 years with no residual value. GULOSITY Co. provides full year depreciation in the year of acquisition. The unadjusted balances of retained earnings are P8,800,000 and P16,800,000 as of December 31, 20x1 and 20x2, respectively. 7. How much is the correct profit in 20x1? a. 7,560,000 c. 4,760,000 d. 5,160,000 b. 5,610,000

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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