Ivanhoe Corp. reported net incomes for the past three years as follows: $246,000 2023 2. 2022 3. $230,000 During the 2023 year-end audit, the following items come to your attention: 2021 1. Ivanhoe bought a truck on January 1, 2020 for $103,900 cash, with an $7,900 estimated residual value and a six-year life. The company debited an expense account for the entire cost of the asset. Ivanhoe uses straight-line depreciation for all trucks. $183,000 During 2023, Ivanhoe changed from straight-line depreciation for its cement plant to double declining balance. The following calculations present depreciation on both bases: Straight-line 2023 $18,780 Double-declining-balance 24,101 2022 $18,780 31,300 2021 $18,780 37,560 The net income for 2023 was calculated using the double declining balance method. In reviewing its provision for uncollectible accounts during 2023, the corporation has determined that 1% is the appropriate amount of bad debt expense to be charged to operations. The company had used 1/2 of 1% as its rate in 2022 and 2021 when the expense had been $8,910 and $5,800, respectively. Ivanhoe recorded bad debt expense using the new rate for 2023. If they had used the old rate, they would have recorded $3,110 less bad debt expense on December 31, 2023.

PROBLEM 8 - AUDITING PROBLEMCompute the following:1. The corrected pre-tax profit for 20212. What is the net effect of the foregoing errors on the total assets at December 31, 2021? 3. What is the total understatement of the total liabilities at December 31, 2021?

Vijay

The Chief Financial Officer of Company X decides to purchase 1000 units of a key component for the company’s core Widget line for $1.0 million in cash. The purchase is recorded as the final entry at the close of business on the last working day of Fiscal Year 2019. As a result....   The Gross Margin declines.   The Payables Turnover ratio increases.   The Return on Equity increases.   The Cash Flow Margin declines.

The following data are accumulated by Geddes Company in evaluating the purchase of $150,000 of equipment, having a four-year useful life:   Net Income Net Cash Flow Year 1 $44,000   $81,500   Year 2 26,000   63,500   Year 3 10,000   47,500   Year 4 3,000   40,500   This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.     Open spreadsheet   Assuming that the desired rate of return is 12%, determine the net present value for the proposal. If required, round to the nearest dollar.   Net present value $fill in the blank 2

Dengar

The accounting records of Ehrlich Inc. show the following data for 20201. Life insurance expense on officers was $10,000.2. Equipment was acquired in early January for $450,000. Straight-line depreciation over a 6-year life is used, with no salvagevalue. For tax purposes, Ehrlich used a 30% rate to calculate depreciation.3. Interest revenue on municipal bonds totaled $3,600.4. Product warranties were estimated to be $90,000 in 2020. Actual repair and labor costs related to the warranties in 2020were $24,000. The remainder is estimated to be paid evenly in 2021 and 2022.5. Sales on an accrual basis were $500,000. For tax purposes, $400,000 was recorded on the installment-sales method.6. Fines incurred for securities violations were $10,600.7. Pretax financial income was $460,000. The tax rate is 30%.Instructions(a) Prepare a schedule starting with pretax financial income in 2020 and ending with taxable income in 2020.(b) Prepare the journal entry for 2020 to record income taxes payable,…

Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year) $ 165,000 76,000 During the first week of January 2021, the following cash expenditures were incurred for repairs and maintenance: Routine maintenance and repairs on the equipment Major overhaul of the equipment that improved efficiency $ 2,150 27,000 The equipment is being depreciated on a straight-line basis over an estimated life of 10 years with a $13,000 estimated residual value. The annual accounting period ends on December 31. Required: 1. Prepare the adjusting journal entry that would have been made at the end of 2020 for depreciation on the manufacturing equipment. 2. Starting at the beginning of 2021, what is the remaining estimated life? 3. Prepare the journal entries to record the two expenditures for repairs and maintenance during 2021.