While examining the accounts of Company on December 31, 2020, the following errors were uncovererd: Dividends of P100,000 had been declared on December 31, 2020 but was not recorded in the books. Improvements in Buildings and equipment for P480,000 had been debited to expense at the end of April in 2019. Improvements are estimated to have estimated life of 8 years. The company failed to record sales commissions payable amounting to P10,500 and P19,000 at the end of 2019 and 2020, respectively Supplies on hand amounting to P6,000 and P15,000 were not recognized at the end of 2019 and 2020, respectively. What is the net effect of the above errors in the 2019 net income? A.P435,500 understated B.P475,500 understated C.P463,500 understated D.P423,500 understated
While examining the accounts of Company on December 31, 2020, the following errors were uncovererd: Dividends of P100,000 had been declared on December 31, 2020 but was not recorded in the books. Improvements in Buildings and equipment for P480,000 had been debited to expense at the end of April in 2019. Improvements are estimated to have estimated life of 8 years. The company failed to record sales commissions payable amounting to P10,500 and P19,000 at the end of 2019 and 2020, respectively Supplies on hand amounting to P6,000 and P15,000 were not recognized at the end of 2019 and 2020, respectively. What is the net effect of the above errors in the 2019 net income? A.P435,500 understated B.P475,500 understated C.P463,500 understated D.P423,500 understated
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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While examining the accounts of Company on December 31, 2020, the following errors were uncovererd:
- Dividends of P100,000 had been declared on December 31, 2020 but was not recorded in the books.
- Improvements in Buildings and equipment for P480,000 had been debited to expense at the end of April in 2019. Improvements are estimated to have estimated life of 8 years.
- The company failed to record sales commissions payable amounting to P10,500 and P19,000 at the end of 2019 and 2020, respectively
- Supplies on hand amounting to P6,000 and P15,000 were not recognized at the end of 2019 and 2020, respectively.
What is the net effect of the above errors in the 2019 net income?
A.P435,500 understated
B.P475,500 understated
C.P463,500 understated
D.P423,500 understated
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