Wildhorse Tool Corporation's December 31 year-end financial statements contained the following errors:December 31, 2022December 31, 2023Ending inventory$10,900overstated$10,200understatedDepreciation expense$3,500overstatedAn insurance premium of $50,400 covering the years 2022, 2023, and 2024 was prepaid in 2022, with the entire amount charged toexpense that year. In addition, on December 31, 2023, fully depreciated machinery was sold for $15,400 cash, but the entry was notrecorded until 2024. There were no other errors during 2022 or 2023, and no corrections have been made for any of the errors.Wildhorse follows ASPE.Answer the following, ignoring income tax considerations.(a)Calculate the total effect of the errors on 2023 net income.Effect of errors on 2023 net income:$

The objective of the question is to calculate the total effect of the errors on 2023 net income for…

Answered: Wildhorse Tool Corporation's December…

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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Martinez Corp. experienced a fire on December 31, 2020, in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances. December 31, 2020 December 31, 2019 Cash $ 38,100 $ 11,100 Accounts receivable (net) 74,000 128,400 Inventory 204,600 183,400 Accounts payable 50,200 90,600 Notes payable 36,500 64,900 Common stock, $100 par 406,600 406,600 Retained earnings 120,000 106,300 Additional information: 1. The inventory turnover is 3.7 times. 2. The return on common stockholders’ equity is 19%. The company had no additional paid-in capital. 3. The receivables turnover is 11.8 times. 4. The return on assets is 19%. 5. Total assets at December 31, 2019, were $607,100. Compute the following for Martinez Corp.. (Round all answers to 0 decimal places, e.g. 2,150.) (a) Cost of goods sold for 2020. $ (b) Net credit…
During your audit of the books of Antigua Corporation for the year ended December 31, 2021, you discovered the following errors during the years 2019, 2020 and 2021. Errors 2019 2020 2021 Understatement of ending inventory 25,000 30,000 Overstatement of ending inventory 16,000 Omission of the following: Prepaid insurance 7,500 10,000 Unearned rent income 8,000 Accrued salaries expense 12,000 10,000 Accrued interest revenue 2,000 3,000 Erroneous capitalization of machinery repairs 15,000 Overstatement of machinery depreciation 1,500 1,500 Erroneous charging to expense of equipment cost 25,000 Understatement of equipment depreciation 2,500 2,500 2,500 Net income for the year 1,500,000 2,000,000 2,250,000 Retained earnings at year-end 7,500,000 8,750,000 9,250,000 Machinery has an estimated useful life of 10 years while equipment is 5 years. REQUIRED: Compute the corrected balances of the…
#26 While examining the December 31, 2018 financial statements of Sydney company, the following errors are discovered: *Inventory on January 1 had been overstated by P30,000. *Inventory on December 31 was understated by P60,000. During 2018, Donna received a P120,000 cash advance from customer for merchandise to be manufactured and shipped during 2019. The amount was credited to sales revenue. *The net income reported on the 2018 income statement before reflecting any adjustment is P3,000,000. What is the corrected net income for the year ended December 31, 2018? ANSWER: 2,970,000 Pls provide solution and explanation for the answer above
23
During the audit of BAC Company's 2029 financial statements, the auditors discovered that the 2029 ending inventory had been understated by $12,000 and that the 2029 beginning inventory was overstated by $9,000. Before the effect of these errors, 2029 pretax income had been computed as $115,000. What should be reported as the correct 2029 pretax income? A) $112,000 B) $94,000 C) $118,000 D) $136,000 E) $103,000
Late on the night of August 30, 2021, an arsonist destroyed the FAITHFUL Inc's warehouse which was full of inventory. The accounting records were stored in another facility and not destroyed in the fire. The company is in the process of filing a claim with its insurance company for the inventory loss due to the fire. Beginning inventory P350,500 Purchases through August 30, 2021 470,250 Net sales revenue through August 30, 2021 745,200 The gross profit percent has historically been 40% of net sales revenue. Estimate the value of the inventory destroyed in the fire using the gross profit method.
Chouchou Company's statements for 2024 and 2025 included the following errors: December 31, 2024 inventory understated 2,000,000 December 31, 2025 inventory overstated 1,000,000 Depreciation for 2024 understated 400,000 |Depreciation for 2025 overstated 800,000 How much should retained earnings be retroactively adjusted on January 1, 2026? 1,400,000 A. increase 1,400,000 B. decrease 600,000 C. increase 600,000 D. decrease
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Swifty Enterprises reported cost of goods sold for 2025 of $1,453, 700 and retained earnings of $5,392, 600 at December 31, 2025. Swifty later discovered that its ending inventories at December 31, 2024 and 2025, were overstated by $102, 820 and $37,880, respectively. Determine the corrected amounts for 2025 cost of goods sold and December 31, 2025, retained earnings. Corrected cost of goods sold $enter a dollar amount Corrected 12/31/25 retained earnings $enter a dollar amount
Swifty Corporation began operations on December 1, 2022. The only inventory transaction in 2022 was the purchase of inventory on December 10, 2022, at a cost of $23 per unit. None of this inventory was sold in 2022. Relevant information for fiscal 2023 is as follows: Ending inventory units: Dec. 31, 2022 Dec. 31, 2023, by purchase date Dec. 2, 2023 July 20, 2023 Mar. 15. July Sept. Dec. 2 During 2023, the following purchases and sales were made: Purchases 20. (a1) 4 320 units at $26 320 units at $27 240 units at $29 120 units at $32 120 31 Ending inventory $ 120 Nov. 151 Dec. Sales Apr. Aug. 20 310 10 18 The company uses the periodic inventory method. 12 200 180 279 Determine ending inventory under specific identification.

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