You have been assigned to examine the financial statements of PC corp. for the year ended December 31, 2021, as prepared following IFRS. You discover the following situations: 1. Physical inventory count on Dec 31, 2021, improperly included merchandise costing $3,800 that had been sold but not delivered until Jan 5, 2022. PC uses a periodic inventory system. 2. Depreciation of $1,700 for 2021 on delivery vehicles was not recorded. 3. A collection of $4,600 on account from a customer received on Dec 31, 2021, was not recorded. 4. At the beginning of 2020, the company purchased equipment for $225,000 (residual value $22,500) and had a useful life of 6 years. The accountant used straight-line amortization but failed to deduct the residual value in the calculation of the depreciation for 2020 and 2021. Instructions: Prepare the required journal entries (if any) to correct PC accounts, assuming each transaction is independent and assuming 2021 books are not closed.
You have been assigned to examine the financial statements of PC corp. for the year ended December 31, 2021, as prepared following IFRS. You discover the following situations: 1. Physical inventory count on Dec 31, 2021, improperly included merchandise costing $3,800 that had been sold but not delivered until Jan 5, 2022. PC uses a periodic inventory system. 2. Depreciation of $1,700 for 2021 on delivery vehicles was not recorded. 3. A collection of $4,600 on account from a customer received on Dec 31, 2021, was not recorded. 4. At the beginning of 2020, the company purchased equipment for $225,000 (residual value $22,500) and had a useful life of 6 years. The accountant used straight-line amortization but failed to deduct the residual value in the calculation of the depreciation for 2020 and 2021. Instructions: Prepare the required journal entries (if any) to correct PC accounts, assuming each transaction is independent and assuming 2021 books are not closed.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 13RE: Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a...
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![You have been assigned to examine the financial statements of PC corp. for the year ended December 31, 2021, as prepared following IFRS. You
discover the following situations:
1. Physical inventory count on Dec 31, 2021, improperly included merchandise costing $3,800 that had been sold but not delivered until Jan
5, 2022. PC uses a periodic inventory system.
2. Depreciation of $1,700 for 2021 on delivery vehicles was not recorded.
3. A collection of $4,600 on account from a customer received on Dec 31, 2021, was not recorded.
4. At the beginning of 2020, the company purchased equipment for $225,000 (residual value $22,500) and had a useful life of 6 years. The
accountant used straight-line amortization but failed to deduct the residual value in the calculation of the depreciation for 2020 and 2021.
Instructions:
Prepare the required journal entries (if any) to correct PC accounts, assuming each transaction is independent and assuming 2021 books are
not closed.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F217af487-2bd5-4c3c-9135-0f568fa5de33%2Ffbc5ef40-5d14-4b3e-944b-f3785e8bfe2d%2F0hlprqb_processed.png&w=3840&q=75)
Transcribed Image Text:You have been assigned to examine the financial statements of PC corp. for the year ended December 31, 2021, as prepared following IFRS. You
discover the following situations:
1. Physical inventory count on Dec 31, 2021, improperly included merchandise costing $3,800 that had been sold but not delivered until Jan
5, 2022. PC uses a periodic inventory system.
2. Depreciation of $1,700 for 2021 on delivery vehicles was not recorded.
3. A collection of $4,600 on account from a customer received on Dec 31, 2021, was not recorded.
4. At the beginning of 2020, the company purchased equipment for $225,000 (residual value $22,500) and had a useful life of 6 years. The
accountant used straight-line amortization but failed to deduct the residual value in the calculation of the depreciation for 2020 and 2021.
Instructions:
Prepare the required journal entries (if any) to correct PC accounts, assuming each transaction is independent and assuming 2021 books are
not closed.
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