B. While examining the accounts of Granny Co. on December 31, 2020, the following errors were uncovered: a. Dividends of P100,000 had been declared on December 15, 2020 but was not recorded in the books. b. An equipment acquired for P480,000 had been debited to expense at the end of April in 2019. The equipment is estimated to have an estimated life of 8 years c. The company failed to record sales commissions payable amounting to P10,500 and P19,000 at the end of 2019 and 2020, respectively. d. Supplies on hand amounting to P6,000 and P15,000 were not recognized at the end of 2019 and 2020, respectively. e. Granny reported net income of P500,000 and P800,000 for 2019 and 2020, respectively. Required: 1. Determine the corrected net income for 2019. 2. Determine the corrected net income for 2020.
B. While examining the accounts of Granny Co. on December 31, 2020, the following errors were uncovered: a. Dividends of P100,000 had been declared on December 15, 2020 but was not recorded in the books. b. An equipment acquired for P480,000 had been debited to expense at the end of April in 2019. The equipment is estimated to have an estimated life of 8 years c. The company failed to record sales commissions payable amounting to P10,500 and P19,000 at the end of 2019 and 2020, respectively. d. Supplies on hand amounting to P6,000 and P15,000 were not recognized at the end of 2019 and 2020, respectively. e. Granny reported net income of P500,000 and P800,000 for 2019 and 2020, respectively. Required: 1. Determine the corrected net income for 2019. 2. Determine the corrected net income for 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:B. While examining the accounts of Granny Co. on December 31, 2020, the following errors were
uncovered:
a. Dividends of P100,000 had been declared on December 15, 2020 but was not recorded in
the books.
b. An equipment acquired for P480,000 had been debited to expense at the end of April in
2019. The equipment is estimated to have an estimated life of 8 years
c. The company failed to record sales commissions payable amounting to P10,500 and
P19,000 at the end of 2019 and 2020, respectively.
d. Supplies on hand amounting to P6,000 and P15,000 were not recognized at the end of
2019 and 2020, respectively.
e. Granny reported net income of P500,000 and P800,000 for 2019 and 2020, respectively.
Required:
1. Determine the corrected net income for 2019.
2. Determine the corrected net income for 2020.
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