The reported net incomes for the first 2 years of Metlock Products, Inc., were as follows: 2025, $139,100; 2026, $189,700. Early in 2027, the following errors were discovered. 1. Depreciation of equipment for 2025 was overstated $15,900. 2. Depreciation of equipment for 2026 was understated $36,700. 3. December 31, 2025, inventory was understated $52,300. 4. December 31, 2026, inventory was overstated $16,300. Prepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit

The reported net incomes for the first 2 years of Metlock Products, Inc., were as follows: 2025, $139,100; 2026, $189,700. Early in 2027, the following errors were discovered. 1. Depreciation of equipment for 2025 was overstated $15,900. 2. Depreciation of equipment for 2026 was understated $36,700. 3. December 31, 2025, inventory was understated $52,300. 4. December 31, 2026, inventory was overstated $16,300. Prepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10MC: Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended...

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(Error Analysis and Correcting Entry) The reported net incomes for the first 2 years of Sandra Gustafson Products, Inc., were as follows: 2017, $147,000; 2018, $185,000. Early in 2019, the following errors were discovered.1. Depreciation of equipment for 2017 was overstated $17,000.2. Depreciation of equipment for 2018 was understated $38,500.3. December 31, 2017, inventory was understated $50,000.4. December 31, 2018, inventory was overstated $16,200.InstructionsPrepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.)
The reported net incomes for the first 2 years of Bridgeport Products, Ic., were as follows: 2020, $161,400; 2021, $190,800. Early in 2022, the following errors were discovered. 1. Depreciation of equipment for 2020 was overstated $18,600. 2. Depreciation of equipment for 2021 was understated $40,900. 3. December 31, 2020, inventory was understated $46,500. 4. December 31, 2021, inventory was overstated $16,200. Prepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit
BALANAR CORP. reports on a calendar-year basis. The financial statements contained the following errors: 2013 2014 Over (under) statement of ending inventory (100,000) 40,000 Depreciation understatement 40,000 60,000 Failure to accrue salaries at year-end 80,000 120,000 As a result of the errors, what was the effect on net income for 2014? А. 240,000 overstated C. 320,000 overstated В. 240,000 understated D. 320,000 understated
Net income for Mory Company for the years 2021 and 2022 is shown below. An audit of the accounts, however, disclosed the following errors: 2021 2022 Net income after income tax 246,500 312,500 Understatement of year-end inventory 25,000 Purchase of computer at year end charged to expense. The estimated useful life is 10 years. 40,000 Credit purchases of merchandise not recorded but included in the physical count at year end 50,000 Rent received in advance and credited to income 18,000 Unrecorded unpaid taxes at year-end 20,000 QUESTIONS: What is the correct net income for the year 2021? What is the correct net income for the year 2022?
At the beginning of the year Candle Co. has an inventory balance of $32,000. The company has net income for the year of $56,000. Later, the accountant discovers an error that caused the beginning invenotory to be understated by $6,000. a. Assuming no other changes, what is the correct net income for the year? b. If the error was discovered after year-end, what was the effect of the error on the balance sheet? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
The draft accounts of Kale & Co. for the year ended 31st Mar 2022 include the following: Revenue $8,000 Gross profit $2,000. It was subsequently discovered that revenue had been understated by $1,000 and closing inventory overstated by $500.After correction of these errors the gross profit percentage margin will be (to 1 d.p.)?
Bol Company's December 31 year-end financial statements had the following errors: December 31, 2020 December 31, 2021 Prepaid insurance 16,000 understated Unearned rental 10,000 understated Depreciation expense 7,200 understated Ending inventory 27,000 understated 39,600 overstated There were no other errors during the year 2020 or 2021 and no corrections have been made for any of the errors. (Ignore income tax considerations) 1. What is the net effect of the errors on Bols 2021 net income? 2. What is the net effect of the errors in Bols December 31, 2021 retained earnings? 3. What is the net effect of the errors in Bol's December 31, 2021 working capital (current assets less current liabilities)?
Malcolm Lee Industries reported the following amounts in its December 31st financial statements: 2020 2021 Cost of Goods sold $270,100 $288,600 Ending Inventory 55,600 55,600 Errors were made in each year as follows: in 2020, ending inventory was overstated by $10,600 while in 2021, ending inventory was understated by $6,600. Explain the impact of these errors for 2021 profit and owners’ equity. Profits will be by $ . Owners’ equity will be by $ . Save for Later Last saved 1 day ago. Saved work will be auto-submitted on the due date. Attempts: 0 of 1 used Submit Answer
The financial record of Adam Inc were destroyed by fire at the end of 2020. Fortunately, the controller had kept certain statistical data related to the income statement as below: a. The beginning inventory was OMR 138,000. b. Sales discount was OMR 25,500 c. 45,000 ordinary shares were outstanding. d. Interest expenses OMR 30,000 e. Income tax rate 30% f. Cost of goods sold OMR 750,000 g. Administrative expenses are 20% of cost of goods sold but only 10% of gross sales. h. Half of the operating expenses related to sales activities. From the foregoing information, prepare an income statement.Page
Swifty Enterprises reported cost of goods sold for 2025 of $1,453, 700 and retained earnings of $5,392, 600 at December 31, 2025. Swifty later discovered that its ending inventories at December 31, 2024 and 2025, were overstated by $102, 820 and $37,880, respectively. Determine the corrected amounts for 2025 cost of goods sold and December 31, 2025, retained earnings. Corrected cost of goods sold $enter a dollar amount Corrected 12/31/25 retained earnings $enter a dollar amount
Baxter Company reported a net loss of $15,070 for the year ended December 31. During the year, accounts receivable decreased by $4,715, merchandise inventory increased by $11,951, accounts payable increased by $9,458, and depreciation expense of $4,513 was recorded. During the year, operating activities under the indirect method
The financial records of LeRoi Jones Inc. were destroyed by fire at the end of 2020. Fortunately, the controller had kept certain statistical data related to the income statement as follows. 1. The beginning merchandise inventory was $92,000 and decreased 20% during the current year. 2. Sales discounts amount to $17,000. 3. 20,000 shares of common stock were outstanding for the entire year. 4. Interest expense was $20,000. 5. The income tax rate is 30%. 6. Cost of goods sold amounts to $500,000. 7. Administrative expenses are 20% of cost of goods sold but only 8% of gross sales. 8. Four-fifths of the operating expenses relate to sales activities. Instructions From the foregoing information prepare an income statement for the year 2020 in single-step form.