What is the effect of the crrors to the 2019 working capital? amountunderstatement 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 thefollowing 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:201920202021Prepaid insurance2.0004.0006,000Accrued salaries7.5006.2008,300Unearned rent5.0006.0007.000Deliveries 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 thesaid 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 grossprofit 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 thecorresponding 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 andhad 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? amountdebil or credit

Working capital refers to the funds that a company has available for its daily operations. It…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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You audited the financial statements of PIS Corp. for the first time in 2022. The company started its operation in early 2020. Upon investigation, you discovered the following information: a. The company reported the net income at P104,000, P140,000 and P160,000 in 2020, 2021, and 2022, respectively. b. The company consistently omitted the following: 2020 2021 2022 Prepaid insurance 2,000 4,000 6,000 Accrued salaries 7,500 6,200 8,300 Unearned rent 5,000 6,000 7,000 c. 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…
Do journal entries for all the transaction
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Upon inspection of the records of Eisenhower Company in connection to its financial statement audit for the year ended December 31, 2022, the following errors were revealed: A fire insurance premium of P 40,000 was paid and charged to insurance expense in 2021. This covers one year from April 1, 2021. Inventory at December 31, 2020 was understated by P 80,000. Inventory at December 31, 2021 was understated by P 120,000. • The year 2021 last quarter taxes amounting to P 60,000 were paid on January 19, 2022 and charged to expense account of 2022. A cash advance of P 100,000 in payment of goods to be delivered in January 2022 was received on December 15, 2021 and credited to Sales. • The gross profit on sales is 40%. The net income for the year ended December 31, 2021 before any adjustments is P 1,550,000. O 1,550,000 O 1,200,000 O 1.440,000 O 1.600,000