The following errors were discovered on the books of Nash Corporation, during the 2024 year-end process, prior to the books being closed for the year. Prepare the journal entries required to correct the below errors, assuming that Nash follows IFRS and has a perpetual inventory system. For this question, ignore income tax. (a) While conducting the year-end inventory count in December 2024, it was discovered that $7,400 of product was omitted from the December 2023 inventory count. The product had been shipped to a customer early in 2024, but had not been included in the 2023 ending inventory. (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 debit entry before credit entry.)

The following errors were discovered on the books of Nash Corporation, during the 2024 year-end process, prior to the books being closed for the year. Prepare the journal entries required to correct the below errors, assuming that Nash follows IFRS and has a perpetual inventory system. For this question, ignore income tax. (a) While conducting the year-end inventory count in December 2024, it was discovered that $7,400 of product was omitted from the December 2023 inventory count. The product had been shipped to a customer early in 2024, but had not been included in the 2023 ending inventory. (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 debit entry before credit entry.)

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

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 14RE: Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a...

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Schmidt Company began operations on January 1, 2018, and used the LIFO inventory method for both financial reporting and income taxes. However, at the beginning of 2020, Schmidt decided to switch to the average cost inventory method for financial and income tax reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the LIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Schmidt is subject to a 21% income tax rate in all years; it pays all income taxes payable in the next quarter. Assume that any deferred tax liability was paid in the subsequent year. Schmidt had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Schmidt had cash of 15,600, inventory of 34,000, other assets of 76,000, income taxes payable of 4,200, and accounts payable of 3,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in method at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.
If Wakowski Companys ending inventory was actually $86,000 but was adjusted at year end to a balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?
Koopman Company began operations on January 1, 2018, and uses they FIFO inventory method for financial reporting and the average cost inventory method for income taxes. At the beginning of 2020, Koopman decided to switch to the average cost inventory method for financial reporting. It had previously reported the following financial statement information for 2019: An analysis of the accounting records discloses the following cost of goods sold under the FIFO and average cost inventory methods: There are no indirect effects of the change in inventory method. Revenues for 2020 total 130,000; operating expenses for 2020 total 30,000. Koopman is subject to a 21% income tax rate in all years; it pays the income taxes payable of a current year in the first quarter of the next year. Koopman had 10,000 shares of common stock outstanding during all years; it paid dividends of 1 per share in 2020. At the end of 2020, Koopman had cash of 10,000, inventory of 24,000, other assets of 70,800, accounts payable of 4,500, and income taxes payable of 6,000. It desires to show financial statements for the current year and previous year in its 2020 annual report. Required: 1. Prepare the journal entry to reflect the change in methods at the beginning of 2020. Show supporting calculations. 2. Prepare the 2020 financial statements. Notes to the financial statements are not necessary. Show supporting calculations.
If Barcelona Companys ending inventory was actually $122,000, but the cost of consigned goods, with a cost value of $20,000 were accidentally included with the company assets, when making the year-end inventory adjustment, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?
Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the allowance method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
During the year ended December 31, 2021, Angel Company revealed the following events: a) A counting error relating to inventory on December 31, 2020 was discovered. This required an increase in the carrying amount of inventory on that date of P500,000. b)It was also decided to write off P50,000 from inventory which was over two years old as it was obsolete. c) The provision for uncollectible accounts on December 31, 2020 was P200,000. During 2021, an amount of P300,000 was written off on the December 31, 2020 accounts receivable. What pretax adjustment is required to restate retained earnings on January 1, 2021? Your answer
During the year ended December 31, 2021, Angel Company revealed the following events: a) A counting error relating to inventory on December 31, 2020 was discovered. This required an increase in the carrying amount of inventory on that date of P500,000. b)It was also decided to write off P50,000 from inventory which was over two years old as it was obsolete. c) The provision for uncollectible accounts on December 31, 2020 was P200,000. During 2021, an amount of P300,000 was written off on the December 31, 2020 accounts receivable. What pretax adjustment is required to restate retained earnings on January 1, 2021?
During 2024, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts: 2022 understated by 2023 overstated by $ 127,000 157,000 WMC uses a periodic inventory system and the FIFO cost method. Required: 1. Determine the effect of these errors on retained earnings at January 1, 2024, before any adjustments @gnore income taxes 2. Prepare a journal entry to correct the errors Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the effect of these errors on retained earnings at January 1, 2024, before any adjustments. (fonare income tas) Retened samimgs would be Required 2 >
During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts: understated by overstated by $128,000 158,000 2019 2020 WMC uses a periodic inventory system and the FIFO cost method. Required: 1. Determine the effect of these errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.) 2. Prepare a journal entry to correct the errors. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the effect of these errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.) Retained earnings would be Required 1 Required 2
For each of the following independent scenarios, indicate the effect of the error (if any) on: i. 2019 net income; ii. 2020 net income; and iii. 2020 closing retained earnings. company uses the periodic system of inventory and its fiscal year-end is December 31. Ignore income tax effects. Consider each of the following independent The scenarios: a. Your analysis of inventory indicates that inventory at the end of 2019 was overstated by $27,000 due to an inventory count error. Inventory at the end of 20 13 was correctly stated. b. Invoices in the amount of $107,000 for inventory received in December 2019 were not entered on the books in 2019. They were recorded as purchases in January 2020 when they were paid. The goods were counted in the 2019 inventory count and included in ending inventory on the 2019 financial statements. c. Goods received on consignment amounting to $89,000 were included in the physical count of goods at the end of 2020 and included in ending inventory on the 2020…
During the year ended December 31, 2021, Samar Company revealed the following events: a) a counting error relating to inventory on December 31, 2020 was discovered. This required a reduction in the carrying amount of inventory on that date of P2,000,000. b) the provision for uncollectible accounts receivable on December 31, 2020 wasP500,000. During 2021, an amount of P800,000 was written off the from the December 31, 2020 accounts receivable. What pretax adjustment is required to restate retained earnings on January 1, 2021?
On January 13, 2025, Carla Vista Corporation discovered that goods in transit of $115,150 with terms FOB shipping point were not included in the inventory count at the December 31, 2023 year-end. The goods were shipped on December 29, 2023 and received by Carla Vista on January 10, 2024. Prepare any correcting journal entry required, assuming Carla Vista uses a periodic inventory system, the books are closed for 2024 and ignore any income tax effects. (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 debit entry before credit entry.) Account Titles and Explanation Debit Credit