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You discovered the following errors in connection with your examination of the financial statements of Joy Corporation: 1) The Company paid one- year insurance premium of P24,000 effective April 1, 2020. The entire amount was debited to asset account and no was made at the end of 2020. adjustment 2) The company leased a portion of its building for P48,000. The term of the ibalbr lease is one year ending April 30, 2021. Collection of rent was credited to unearned rent revenue account. At the end of 2020, no entry was made to 000.0S take up the earned portion of the amount collected. 3) Depreciation expense in 2020 was understated by P12,000. 4) Improvements on building amounting to P200,000 had been charged to expense on January 1, 2020. Improvements have a life of 5 years. 5) On January 1, 2020, an equipment costing P40,000 was sold for P20,000. At the date of sale, the equipment had an accumulated depreciation of P15,000. The cash received was recorded as other income in 2020. oW 6) Repairs expense on the building amounting to P20,000 had been charged to the building account on January 1, 2020. Depreciation expense has been recorded in 2020 and 2021 based on the 5 year remaining useful life of the building. The following data were extracted from the financial statements of Joy Corporation: 000.0S 2020 2021 Net income Working capital 000.92 RE, end of the year 100,000 300,000 100,000 150,0000, 400,000000S d 250,000

You discovered the following errors in connection with your examination of the financial statements of Joy Corporation: 1) The Company paid one- year insurance premium of P24,000 effective April 1, 2020. The entire amount was debited to asset account and no was made at the end of 2020. adjustment 2) The company leased a portion of its building for P48,000. The term of the ibalbr lease is one year ending April 30, 2021. Collection of rent was credited to unearned rent revenue account. At the end of 2020, no entry was made to 000.0S take up the earned portion of the amount collected. 3) Depreciation expense in 2020 was understated by P12,000. 4) Improvements on building amounting to P200,000 had been charged to expense on January 1, 2020. Improvements have a life of 5 years. 5) On January 1, 2020, an equipment costing P40,000 was sold for P20,000. At the date of sale, the equipment had an accumulated depreciation of P15,000. The cash received was recorded as other income in 2020. oW 6) Repairs expense on the building amounting to P20,000 had been charged to the building account on January 1, 2020. Depreciation expense has been recorded in 2020 and 2021 based on the 5 year remaining useful life of the building. The following data were extracted from the financial statements of Joy Corporation: 000.0S 2020 2021 Net income Working capital 000.92 RE, end of the year 100,000 300,000 100,000 150,0000, 400,000000S d 250,000

FINANCIAL ACCOUNTING
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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Chapter 6 - Correction of Errors 5. Working capital, end of 2021 P400,000 b. P424,000 a. c. P394,000 d. P416,000 mes Retained earnings, end of 2021 pa. P250,000 b. P244,000 6. c. P345,000 ufbs d. P266,000 7. Prepare adjusting entries assuming errors were discovered in (a) 2020, (b) 2021, and (c) 2022.
Transcribed Image Text:Chapter 6 - Correction of Errors 5. Working capital, end of 2021 P400,000 b. P424,000 a. c. P394,000 d. P416,000 mes Retained earnings, end of 2021 pa. P250,000 b. P244,000 6. c. P345,000 ufbs d. P266,000 7. Prepare adjusting entries assuming errors were discovered in (a) 2020, (b) 2021, and (c) 2022.
1, 2020. The entire amount was debited to asset account and no adjustment Chapter 6 - Correction of Errors PROBLEM 6-4 Noncounterbalancing Errors erb You discovered the following errors in connection with your examination of the financial statements of Joy Corporation: f g1) The Company paid one- year insurance premium of P24,000 effective April 1, 2020. The entire amount was debited to asset account and no adjustment was made at the end of 2020. 00 2) The company leased a portion of its building for P48,000. The term of the ibabr lease is one year ending April 30, 2021. Collection of rent was credited to unearned rent revenue account. At the end of 2020, no entry was made to 000,0S take up the earned portion of the amount collected. 3) Depreciation expense in 2020 was understated by P12,000. 4) Improvements on building amounting to P200,000 had been charged to expense on January 1, 2020. Improvements have a life of 5 years. 5) On January 1, 2020, an equipment costing P40,000 was sold for P20,000. At the date of sale, the equipment had an accumulated depreciation of P15,000. The cash received was recorded as other income in 2020. 6) Repairs expense on the building amounting to P20,000 had been charged to the building account on January 1, 2020. Depreciation expense has been recorded in 2020 and 2021 based on the 5 year remaining useful life of the building. The following data were extracted from the financial statements of Joy Corporation: 000.0 2020 2021 anichoW S Net income Working capital RE, end of the year 100,000 300,000 100,000 150,000 00T 400,00000,0SESd 250,000
Transcribed Image Text:1, 2020. The entire amount was debited to asset account and no adjustment Chapter 6 - Correction of Errors PROBLEM 6-4 Noncounterbalancing Errors erb You discovered the following errors in connection with your examination of the financial statements of Joy Corporation: f g1) The Company paid one- year insurance premium of P24,000 effective April 1, 2020. The entire amount was debited to asset account and no adjustment was made at the end of 2020. 00 2) The company leased a portion of its building for P48,000. The term of the ibabr lease is one year ending April 30, 2021. Collection of rent was credited to unearned rent revenue account. At the end of 2020, no entry was made to 000,0S take up the earned portion of the amount collected. 3) Depreciation expense in 2020 was understated by P12,000. 4) Improvements on building amounting to P200,000 had been charged to expense on January 1, 2020. Improvements have a life of 5 years. 5) On January 1, 2020, an equipment costing P40,000 was sold for P20,000. At the date of sale, the equipment had an accumulated depreciation of P15,000. The cash received was recorded as other income in 2020. 6) Repairs expense on the building amounting to P20,000 had been charged to the building account on January 1, 2020. Depreciation expense has been recorded in 2020 and 2021 based on the 5 year remaining useful life of the building. The following data were extracted from the financial statements of Joy Corporation: 000.0 2020 2021 anichoW S Net income Working capital RE, end of the year 100,000 300,000 100,000 150,000 00T 400,00000,0SESd 250,000
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