Please show the complete solution. Thank you At the beginning of 20x2, Jericho, Inc. discovered the following errors made in the preceding two (2) years: 20x1 20x2 Overstatement of ending inventory P50,000 P20,000 Omission of wages payable 7,000 8,000 Omission of allowance for doubtful accounts 13,000 17,000 Prepaid insurance recorded as expense 5,000 2,000 The reported net income was P270,000 in 20x1, and P350,000 in 20x2. The allowance for doubtful accounts had a zero balance at the beginning of 20x1. No accounts were written off during 20x1 or 20x2. Ignore income taxes. REQUIRED: Corrected net income for 20x1 Corrected net income for 20x2

Please show the complete solution. Thank you At the beginning of 20x2, Jericho, Inc. discovered the following errors made in the preceding two (2) years: 20x1 20x2 Overstatement of ending inventory P50,000 P20,000 Omission of wages payable 7,000 8,000 Omission of allowance for doubtful accounts 13,000 17,000 Prepaid insurance recorded as expense 5,000 2,000 The reported net income was P270,000 in 20x1, and P350,000 in 20x2. The allowance for doubtful accounts had a zero balance at the beginning of 20x1. No accounts were written off during 20x1 or 20x2. Ignore income taxes. REQUIRED: Corrected net income for 20x1 Corrected net income for 20x2

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter16: Advanced Topics Concerning Complex Auditing Judgments

Section: Chapter Questions

Problem 36RSCQ

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PROBLEM 1 (ERROR CORRECTION) Koshu Co., a calendar year entity, contained the following independent errors at the end of each reporting period: (Amounts in thousands) 2020 50 under 2019 40 under 12 under 68 under 25 under 2018 Accounts Payable Depreciation Expense Merchandise Inventory 20 over 16 under 33 over 45 under 97 over Accrued Income 33 over 56 under Unearned Income 14 under 85 over 27 over 45 under Advances to Suppliers 105 under Advances from Customers Accounts Receivable Accrued Expense Prepaid Expense 82 over 71 under 68 under 85 under 92 over 78 under 27 under 17 over 19 over 18 under 12 under Compute for the following: a. Net adjustments on 2018 and 2020 Profits b. Effects of errors on the 2019 and 2020 Accumulated Profits c. Net adjustments to 2018 and 2019 Working Capital d. Adjusted total 2018 and 2020 Total Assets assuming unadjusted balances of total assets of 2018 and 2020 were P890 and P920, respectively e. Effects of errors on 2018 and 2019 Total Liabilities
8.3 At the end of the current year, the accounts receivable account has a debit balance of $1,935,000 and sales for the year total $26,710,000. The allowance account before adjustment has a debit balance of $10,200. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $175,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions c listed above.
Hide or show questions Progress:51/69 items Calculator Allowance for Doubtful Accounts has a debit balance of $2,300 at the end of the year (before adjustment). The company prepares an analysis of customers' accounts and estimates the amount of uncollectible accounts to be $31,900. Which of the following adjusting entries is needed to record the Bad Debt Expense for the year? a.debit Allowance for Doubtful Accounts, $29,600; credit Bad Debt Expense, $29,600 b.debit Allowance for Doubtful Accounts, $34,200; credit Bad Debt Expense, $34,200 c.debit Bad Debt Expense, $29,600; credit Allowance for Doubtful Accounts, $29,600 d.debit Bad Debt Expense, $34,200; credit Allowance for Doubtful Accounts, $34,200
Assume that Simple Company had credit sales of $259,000 and cost of goods sold of $159,000 for the period. Simple uses the aging method and estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $3,900. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $340. Required: What amount of Bad Debt Expense would the company record as an end-of-period adjustment? Bad Debt Expense
At the beginning of current year, ABC company reported that the allowance for doubtful account has a acredit balance of $170,000. The company uses the aging of accounts receivable as a way to estimate the allowance The following schedule was prepared: Not yet due $1,700,000 NL uncollectible1-30 days pasat due $1,200,000 5% uncollectible31-60 days past due $100,000 25% uncollectible61-90 days past due $150,000 50% uncollectibleover 90 days past due. $120,000 100% uncollectible Questions:1) What is the required allowance for doubtful accounts at year-end?2) How much would be the doubtful accounts expense for the current year?3) What is the adjusting entry for the doubtful accounts expense for the current year?4) What is the net realizable value of accounts receivable at year-end?5) What is the effect on current assets should the adjustment was not made?
PLEASE ANSWER ASAP. THANK YOU SO MUCH. During your examination of the accounting books of South Sky Company for the year ended December 31, 2022 revealed the following errors: 1. Unrecorded unpaid salaries at the end of 2021 and 2022 were P 100,000 and P 140,000, respectively. 2. The following errors were discovered in the audit of inventory at December 31, 2021: (a) over footing, P 220,000; (b) Under extension, P 30,000. 3. Unexpired insurance of P 120,000 for the year 2023 was expensed in 2022. 4. Unrecorded interest receivable at the end of 2023, P 20,000. 5. The proceeds of P 220,000 from sale of a machinery with a cost of P 400,000 was credited to Miscellaneous Income on January 1, 2022. The machinery was 60% depreciated on the date of sale. Depreciation for 2022 was recorded at the rate of 10%. The reported net income at the end of 2021 and 2022 were P 1,750,000 and P 2,000,000, respectively. QUESTIONS: 1. what is the correct net income for the year 2021? 2. What is the correct…
At its fiscal year end, under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $12,000. The unadjusted balance for the Allowance for Doubtful Accounts is $2,000 credit. Assume the company records adjusting entries only at year end. What is the balance in the Allowance for Doubtful Accounts account after adjustment? A. $14,000 B. $12,000 O C. $10,000 D. $2,000
BB Trading Ltd.used the allowance method to estimate impairment loss of receivable. An aging of account receivable revealed the following: Aging Group $. Estimated% Uncollectible 1-30 days old 65,000 1 30-60 days old 10,000. 15 more than 60 days old. 4000 40 Total Accounts Receivable. $79,000 A debt balance of $500was shown in the Allowance for Impairment on 31December 2015 immediately BEFORE the year-end adjustments a) Compute the balance that should be reported in the Allowance foe impairment at 31 December 2015. b)Prepare an adjusting entry on 31 December 2015 to recognize the impairment loss of receivable. Explanation of Journal Entry is not required. c) Determine the expected net realizable value of the accounts receivable as of 31 December 2015.
USE TGHE FOLLOWING TO SOLVE FOR QUESTION7 ONLY Tooele Company’s controller estimated bad debt expense using the percentage of accountsreceivable method. Total sales for the year were $500,000 of which 250,000 are on account.The ending balance in accounts receivable was $100,000. An examination of the outstandingaccounts at the end of the year indicates that approximately 12 percent of these accounts willultimately prove to be uncollectible. Before any adjusting entries, the balance in theAllowance for Doubtful Accounts is $700 (CREDIT). Which is part of the correct adjustingentry to record bad debt expense for the year?(The Allowance for Doubtful Accounts is also known as the Allowance for Bad Debts or theAllowance for Uncollectible Accounts.)a. CREDIT Allowance for Bad Debts for $11,300b. DEBIT Allowance for Bad Debts for $11,300c. CREDIT Allowance for Bad Debts for $12,000d. CREDIT Allowance for Bad Debts for $12,700e. DEBIT Allowance for Bad Debts for $14,700 5. Use the…
Candle Stix estimates that 2% of the $100,000 balance in accounts receivable is uncollectible. Prior to year-end adjusting entries, there is a $400 debit balance in allowance for doubtful accounts. What is the net realizable value of accounts receivable after year-end adjusting entries? Select one: a. $97,600 b. $98,000 c. $99,600 d. $101,920
3. A company has an unadjusted debit balance in the Allowance for Doubtful Accounts of $10,000 and the following aging schedule: Name of Customer A B с D Total Percent Uncollectible Total $55,000 112,000 106,000 43,000 $316,000.00 Under 30 days $ 30,000 90,000 65,000 35,000 30-60 days $20,000 10,000 22,000 2,000 $ 220,000.00 $54,000.00 1% 30% What amount should be recorded as the Bad Debt Expense? 60-90 days 5,000 15,000 5,000 $25,000.00 25% Over 90 days $5,000 7,000 4,000 1,000 $17,000.00 35%
At the beginning of the year, the balance in the Allowance for Doubtful Accounts is a credit of $743. During the year, $344 of previously written off accounts were reinstated and accounts totaling $756 are written off as uncollectible. The end-of-year balance (before adjustment) in the Allowance for Doubtful Accounts should be the one listed below. a.$331 b.$756 c.$344 d.$743

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	20x1	20x2
Overstatement of ending inventory	P50,000	P20,000
Omission of wages payable	7,000	8,000
Omission of allowance for doubtful accounts	13,000	17,000
Prepaid insurance recorded as expense	5,000	2,000