Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 4, Problem 3C
To determine
Write a short report the bookkeeper explain the loss contingencies and subsequent events and their importance of disclosure on the balance of the Company.
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To correct all errors they discover in the accounting records for the year under audit. The auditors should prepare adjusting journal entries for material items only. Because they are concerned with the fairness, not the preciseness, of the client's financial statements.
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Question: The effect on 2018 net income of Lukas Company of its failure to record the CM involving transaction with Falcon amounted
By how much would the December 31, 2021 retained earnings be misstated if no adjustments were made for the above errors?
Compute for the adjusted net income for the year 2021.
Chapter 4 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 4 - What is the accounting equation? The balance sheet...Ch. 4 - Prob. 2GICh. 4 - How does the balance sheet at the end of an...Ch. 4 - What does recognition mean in accounting?Ch. 4 - Prob. 5GICh. 4 - Prob. 6GICh. 4 - What is equity? How is equity determined?Ch. 4 - What is a mixed attribute measurement model? Why...Ch. 4 - Identify at least five alternatives for measuring...Ch. 4 - Identify at least three alternatives for measuring...
Ch. 4 - Prob. 11GICh. 4 - Prob. 12GICh. 4 - Prob. 13GICh. 4 - Prob. 14GICh. 4 - Prob. 15GICh. 4 - Prob. 16GICh. 4 - Define (a) common stock, (b) additional paid-in...Ch. 4 - Prob. 18GICh. 4 - Prob. 19GICh. 4 - What are investments by owners? Distributions to...Ch. 4 - What accounting policies are disclosed in the...Ch. 4 - Give several examples of financial instruments and...Ch. 4 - Prob. 23GICh. 4 - Prob. 24GICh. 4 - Prob. 25GICh. 4 - Prob. 26GICh. 4 - Prob. 27GICh. 4 - Prob. 28GICh. 4 - Prob. 29GICh. 4 - Prob. 30GICh. 4 - Prob. 31GICh. 4 - Prob. 32GICh. 4 - Prob. 33GICh. 4 - Prob. 34GICh. 4 - A donated fixed asset (from a governmental unit)...Ch. 4 - Prob. 2MCCh. 4 - Prob. 3MCCh. 4 - On October 2, 2020, a company borrowed cash and...Ch. 4 - Prob. 5MCCh. 4 - Rent revenue collected 1 month in advance should...Ch. 4 - Prob. 7MCCh. 4 - Prob. 8MCCh. 4 - Which of the following should be disclosed in the...Ch. 4 - Prob. 10MCCh. 4 - Prob. 1RECh. 4 - Dorothy Corporation had the following accounts in...Ch. 4 - Dorothy Corporation had the following accounts in...Ch. 4 - Based on the information in RE4-2 and RE4-3,...Ch. 4 - Prob. 5RECh. 4 - Oz Corporation has the following assets at...Ch. 4 - Prob. 7RECh. 4 - Prob. 8RECh. 4 - Scarecrow Inc. issues 50,000 shares of 2 par value...Ch. 4 - Tinman Corporation reports the following balances...Ch. 4 - Prob. 1ECh. 4 - Plant and Equipment Your analysis of Moen...Ch. 4 - GRAF CORPORATION Shareholders Equity Section of...Ch. 4 - Prob. 4ECh. 4 - Classifications on Balance Sheet The balance sheet...Ch. 4 - Balance Sheet Baggett Companys balance sheet...Ch. 4 - Prob. 7ECh. 4 - Balance Sheet Calculations Dawson Companys balance...Ch. 4 - Prob. 9ECh. 4 - Correction of Balance Sheet On December 31, 2019,...Ch. 4 - Prob. 11ECh. 4 - Prob. 12ECh. 4 - Classifications on Balance Sheet The current...Ch. 4 - Balance Sheet without Amounts The following is an...Ch. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Balance Sheet Calculations Cornerstone Development...Ch. 4 - Prob. 6PCh. 4 - Complex Balance Sheet Presented below is the...Ch. 4 - Analyzing Starbuckss Balance Sheet Disclosures...Ch. 4 - Prob. 9PCh. 4 - Balance Sheet The following is a list (in random...Ch. 4 - Balance Sheet The following is an alphabetical...Ch. 4 - Balance Sheet from Adjusted Trial Balance The...Ch. 4 - Balance Sheet and Notes Listed here in random...Ch. 4 - Comprehensive: Balance Sheet, Schedules, and Notes...Ch. 4 - Use following formation for P4-15 and P4-16:...Ch. 4 - Ratios Analyses: McCormick Refer to the...Ch. 4 - Prob. 17PCh. 4 - Use the following information for P417 and P418:...Ch. 4 - Prob. 1CCh. 4 - It is the end of 2019 and you are an accountant...Ch. 4 - Prob. 3CCh. 4 - Valuation of Assets and Stock A friend has come to...Ch. 4 - It is February 16, 2020, and you are auditing...Ch. 4 - You are the accountant for Speedy Company and are...Ch. 4 - Prob. 7CCh. 4 - Prob. 8CCh. 4 - Situation You are the assistant accountant for...
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- Assume that you will be unable to inspect the securities owned by the client on the balance sheet date. What changes should be made to audit procedures if the inspection is not performed until two weeks after the balance sheet date?arrow_forwardBy how much would the December 31, 2021 retained earnings be misstated if no adjustments were made for the above errors? Compute for the adjusted net income for the year 2021. *arrow_forwardThe CPA firm auditing Mason Street Recording Studiosfound that total stockholders’ equity was understated andliabilities were overstated. Which of the following errorscould have been the cause?a. Making the adjustment entry for depreciation expensetwice.b. Failure to record interest accrued on a note payable.c. Failure to make the adjusting entry to record revenuethat had been earned but not yet billed to clients.d. Failure to record the earned portion of fees received inadvance.arrow_forward
- A. By how much would the December 31, 2021 retained earnings be misstated if no adjustments were made for the above errors? B. Compute for the adjusted net income for the year 2021.arrow_forwardCourse: Auditing You are the audit partner of ‘Power Auditors’ and you are auditing your client ‘Freefall Incorporated’. After finishing all the tests on the client’s financial information you determine that there is a material misstatement in the accounts receivable account of your client. This misstatementhas also caused the sales revenue account to be materially misstated. You have notified the client about the misstatement but as of reporting date, client has not made any corrections. You also found misstatements in the fixed assets and accounts payable accounts, but they are not material as per your assessment. You found no other misstatements in the otheraccounts. In addition to this, you also notice that the client has a large amount of debt which will be due next year. As the business has suffered a loss this year and does not have enough cash low at the end of the year to pay the debt next year, the client will need to secure some form of refinancing next year. Without this…arrow_forwardDuring your annual audit of Walker Distributing Company, your assistant, Jane Williams, reports to you that, although a number of entries were made during the year in the general ledger account Notes Payable to Officers, she decided that it was not necessary to audit the account because it had a zero balance at year-end. Required: Do you agree with your assistant’s decision? Discuss.arrow_forward
- Determine the following as a result of your audit:a. What is the correct balance of the accounts receivable as of June 30, 2022? b. What is the balance of the allowance for bad debts as of June 30, 2022? c. What is the balance of bad debts expense in its income statement for year ended June 30, 2022?arrow_forwardrequired: 1.By how much would the December 31, 2021 retained earnings be misstated ifno adjustments were made for the above errors? 2.Compute for the adjusted net income for the year 2021.arrow_forwardwhat happen when the company do not do audit in their financial statement?arrow_forward
- Listen Time: 8 minutes For the following statements identify the assertion related to the risk of material misstatement. Explain your choice. Statement 1: "I am concerned that several of the significant accounts receivable balances on the Balance Sheet are uncollectible" Statement 2: "I am concerned that several of the revenue transactions that were recorded during the year didn't actually happen" Statement 3: "I am concerned that there is a significant unrecorded liability that should be recorded on the Balance Sheet" Statement 4: "I am concerned that assets that don't actually exist were recored on the Balance Sheet!" BIU Format tvarrow_forwardWhat's the best option?arrow_forwardSee photoarrow_forward
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