You were able to gather the following from your first-time audit client, ABC Corporation, as of and for the period ended December 31, 2021: Supplies bought last October 20, 2020; 10% used during 2020; 20% remaining as of December 31, 2021; entry made in 2020 includes a debit to expense for the whole amount 50,000 Advance rental payment for 3 months paid to lessor on November 30, 2021; amount charged to rent expense; no adjusting entry made Sales recorded on January 2, 2022 pertaining to a merchandise shipped to a customer last December 28, 2021; FOB Shipping point 30,000 120,000 Purchases recorded last December 30, 2021; merchandise was shipped last December 29, 2021, received January 3, 2022; FOB Destination Interest on an amount lent to a borrower; note was received last December 1, 2021; term is 6 months; 45,000 face value is P100,000; no interest income recorded; interest rate per annum is A minor repair on an equipment on January 2, 2021 was capitalized; the useful life of the equipment on 9% January 2, 2021 was 6 years 300,000
You were able to gather the following from your first-time audit client, ABC Corporation, as of and for the period ended December 31, 2021: Supplies bought last October 20, 2020; 10% used during 2020; 20% remaining as of December 31, 2021; entry made in 2020 includes a debit to expense for the whole amount 50,000 Advance rental payment for 3 months paid to lessor on November 30, 2021; amount charged to rent expense; no adjusting entry made Sales recorded on January 2, 2022 pertaining to a merchandise shipped to a customer last December 28, 2021; FOB Shipping point 30,000 120,000 Purchases recorded last December 30, 2021; merchandise was shipped last December 29, 2021, received January 3, 2022; FOB Destination Interest on an amount lent to a borrower; note was received last December 1, 2021; term is 6 months; 45,000 face value is P100,000; no interest income recorded; interest rate per annum is A minor repair on an equipment on January 2, 2021 was capitalized; the useful life of the equipment on 9% January 2, 2021 was 6 years 300,000
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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 12C
Related questions
Question
Determine the net increase/decrease in net income for 2021.
![You were able to gather the following from your first-time audit client, ABC Corporation, as of and for the
period ended December 31, 2021:
Supplies bought last October 20, 2020; 10% used during
2020; 20% remaining as of December 31, 2021; entry
made in 2020 includes a debit to expense for the
whole amount
50,000
Advance rental payment for 3 months paid to lessor on
November 30, 2021; amount charged to rent expense;
no adjusting entry made
Sales recorded on January 2, 2022 pertaining to a
30,000
merchandise shipped to a customer last December
28, 2021; FOB Shipping point
Purchases recorded last December 30, 2021; merchandise
was shipped last December 29, 2021, received
120,000
January 3, 2022; FOB Destination
Interest on an amount lent to a borrower; note was
received last December 1, 2021; term is 6 months;
45,000
face value is P100,000; no interest income recorded;
interest rate per annum is
A minor repair on an equipment on January 2, 2021 was
capitalized; the useful life of the equipment on
January 2, 2021 was 6 years
9%
300,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3dbd5646-69fb-4bbd-9c85-f2168d2ab7fc%2F7395ca5c-4c64-4baf-af84-ed104cb4d482%2F2t6hqge_processed.jpeg&w=3840&q=75)
Transcribed Image Text:You were able to gather the following from your first-time audit client, ABC Corporation, as of and for the
period ended December 31, 2021:
Supplies bought last October 20, 2020; 10% used during
2020; 20% remaining as of December 31, 2021; entry
made in 2020 includes a debit to expense for the
whole amount
50,000
Advance rental payment for 3 months paid to lessor on
November 30, 2021; amount charged to rent expense;
no adjusting entry made
Sales recorded on January 2, 2022 pertaining to a
30,000
merchandise shipped to a customer last December
28, 2021; FOB Shipping point
Purchases recorded last December 30, 2021; merchandise
was shipped last December 29, 2021, received
120,000
January 3, 2022; FOB Destination
Interest on an amount lent to a borrower; note was
received last December 1, 2021; term is 6 months;
45,000
face value is P100,000; no interest income recorded;
interest rate per annum is
A minor repair on an equipment on January 2, 2021 was
capitalized; the useful life of the equipment on
January 2, 2021 was 6 years
9%
300,000
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