ABC Company reported net income and retained earnings for a two – year period as follows: Net Income Retained Earnings, Ending 2020 6,000,000 6,000,000 2021 8,000,000 14,000,000 In checking the statement for the year ended December 31, 2020, the following errors are discovered: The company paid one – year insurance premium of P 240,000 effective April 1, 2020. The entire amount was debited to asset account and no adjustment was made at the end of 2020. The company leased a portion of its building for P 480,000. The term of the 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 take up the earned portion of the amount collected. Depreciation expense in 2020 was understated by P 12,000. Depreciation expense in 2021 was overstated by P 14,000. Bad debts expense of P 11,000 was not recorded in 2020. How much is the adjusted December 31, 2020 Retained Earnings Balance?
ABC Company reported net income and retained earnings for a two – year period as follows: Net Income Retained Earnings, Ending 2020 6,000,000 6,000,000 2021 8,000,000 14,000,000 In checking the statement for the year ended December 31, 2020, the following errors are discovered: The company paid one – year insurance premium of P 240,000 effective April 1, 2020. The entire amount was debited to asset account and no adjustment was made at the end of 2020. The company leased a portion of its building for P 480,000. The term of the 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 take up the earned portion of the amount collected. Depreciation expense in 2020 was understated by P 12,000. Depreciation expense in 2021 was overstated by P 14,000. Bad debts expense of P 11,000 was not recorded in 2020. How much is the adjusted December 31, 2020 Retained Earnings Balance?
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
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...
Related questions
Topic Video
Question
69
ABC Company reported net income and
Net Income Retained Earnings, Ending
2020 6,000,000 6,000,000
2021 8,000,000 14,000,000
In checking the statement for the year ended December 31, 2020, the following errors are discovered:
- The company paid one – year insurance premium of P 240,000 effective April 1, 2020. The entire amount was debited to asset account and no adjustment was made at the end of 2020.
- The company leased a portion of its building for P 480,000. The term of the 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 take up the earned portion of the amount collected.
- Depreciation expense in 2020 was understated by P 12,000.
- Depreciation expense in 2021 was overstated by P 14,000.
Bad debts expense of P 11,000 was not recorded in 2020.
How much is the adjusted December 31, 2020 Retained Earnings Balance?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning