Incredible and Joyful are partners who share profit on a 60:40 ratio. At the end of 2021, the partnership books showed a net income of P150,000. It was disclosed however that the following errors and omissions were noted (see image below).How much is the corrected net income in 2021? Accrued expense not recordedInventory understatedAdvances from client recorded asrevenueUnused supplies not taken upAccrued revenue not recordedDepreciation, understatedDepreciation overstated20201,2001,0002,5003,00020213,0005,0003,500

Revaluation of the assets and liabilities and auditing of the past expenses and incomes is a…

Answered: Incredible and Joyful are partners who…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Incredible and Joyful are partners who share profit on a 60:40 ratio. At the end of 2021, the partnership books showed a net income of P150,000. It was disclosed however that the following errors and omissions were noted (see image below). How much is the corrected net income in 2021?

Accrued expense not recorded
Inventory understated
Advances from client recorded as
revenue
Unused supplies not taken up
Accrued revenue not recorded
Depreciation, understated
Depreciation overstated
2020
1,200
1,000
2,500
3,000
2021
3,000
5,000
3,500

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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