Homework Help is Here – Start Your Trial Now!
Business
Accounting
You audited the financial statements of PIS Corp. for the first time in 2021. The company started its operation in early 2019. Upon investigation, you discovered the following information: . . The company reported the net income at P104,000, P140,000 and P160,000 in 2019, 2020, and 2021, respectively. The company consistently omitted the following: Prepaid insurance Accrued salaries Unearned rent 2019 2,000 7.500 5,000 2020 4,000 6,200 2021 6,000 8,300 6,000 • Deliveries of merchandise to customers at December 31 of each year end were recorded as sales upon collection the following year. The corresponding sales price of the said deliveries were P15,000, P12,000 and P14,000 in 2019, 2020, and 2021, respectively. 7,000

You audited the financial statements of PIS Corp. for the first time in 2021. The company started its operation in early 2019. Upon investigation, you discovered the following information: . . The company reported the net income at P104,000, P140,000 and P160,000 in 2019, 2020, and 2021, respectively. The company consistently omitted the following: Prepaid insurance Accrued salaries Unearned rent 2019 2,000 7.500 5,000 2020 4,000 6,200 2021 6,000 8,300 6,000 • Deliveries of merchandise to customers at December 31 of each year end were recorded as sales upon collection the following year. The corresponding sales price of the said deliveries were P15,000, P12,000 and P14,000 in 2019, 2020, and 2021, respectively. 7,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
What is the effect of the crrors to the 2019 working capital? amount understatement or overstatement
Transcribed Image Text:What is the effect of the crrors to the 2019 working capital? amount understatement or overstatement
You audited the financial statements of PIS Corp. for the first time in 2021. The company started its operation in early 2019. Upon investigation, you discovered the following information: - The company reported the net income at P104,000, P140,000 and P160,000 in 2019, 2020, and 2021, respectively. - The company consistently omitted the following: 2019 2020 2021 Prepaid insurance 2.000 4.000 6,000 Accrued salaries 7.500 6.200 8,300 Unearned rent 5.000 6.000 7.000 Deliveries of merchandise to customers at December 31 of each year end were recorded as sales upon collection the following year. The corresponding sales price of the said deliveries were P15,000, P12.000 and P14,000 in 2019, 2020, and 2021. respectively. Inventory counts were conducted on December 31 of cach year bcfore any deliveries and receipts were made on the said date. Sales were made consistently at a gross profit rate of 40% of sales. Purchases in transit at cach year end amounted to P5,000 and P7.000 in 2020 and 2021 respectively. Thesc were recorded as purchases upon receipt of the corresponding invoices in December. The company incurred pre-operating and organization costs totaling P80.000 in early 2019 which it had capitalized as intangible asset and amortized over 5 years. Improvements were made and completed carly in 2019 on the leased office space costing P100.000 which it had capitalized to a leasehold improvements account and had depreciated over its life which was 10 years. The term of the non-cancellable lease however is 5 years without renewal option. What is the retroactive adjustment to the 2021 beginning relained camings? amount debil or credit
Transcribed Image Text:You audited the financial statements of PIS Corp. for the first time in 2021. The company started its operation in early 2019. Upon investigation, you discovered the following information: - The company reported the net income at P104,000, P140,000 and P160,000 in 2019, 2020, and 2021, respectively. - The company consistently omitted the following: 2019 2020 2021 Prepaid insurance 2.000 4.000 6,000 Accrued salaries 7.500 6.200 8,300 Unearned rent 5.000 6.000 7.000 Deliveries of merchandise to customers at December 31 of each year end were recorded as sales upon collection the following year. The corresponding sales price of the said deliveries were P15,000, P12.000 and P14,000 in 2019, 2020, and 2021. respectively. Inventory counts were conducted on December 31 of cach year bcfore any deliveries and receipts were made on the said date. Sales were made consistently at a gross profit rate of 40% of sales. Purchases in transit at cach year end amounted to P5,000 and P7.000 in 2020 and 2021 respectively. Thesc were recorded as purchases upon receipt of the corresponding invoices in December. The company incurred pre-operating and organization costs totaling P80.000 in early 2019 which it had capitalized as intangible asset and amortized over 5 years. Improvements were made and completed carly in 2019 on the leased office space costing P100.000 which it had capitalized to a leasehold improvements account and had depreciated over its life which was 10 years. The term of the non-cancellable lease however is 5 years without renewal option. What is the retroactive adjustment to the 2021 beginning relained camings? amount debil or credit
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps with 3 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Tax loss carryovers
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS