Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 2, Problem 12E
Exercise 2-12 Effect of an error on financial statements
On April 1, 2018, Maine Corporation paid $18,000 cash in advance for a one-year lease on an office building. Assume that Maine records the prepaid rent as an asset and that the books are closed on December 31.
Required
a. Show the payment for the one-year lease and the related
b. Assume that Maine Corporation failed to record the adjusting entry to reflect using the office building. How would the error affect the company’s 2018 income statement and balance sheet?
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Problem 6-6 (AICPA Adapted)
On January 1, 2021, Remarkable Company had the following
account balances:
Note receivable from sale of an idle building
Note receivable from an officer
7,500,000
2,000,000
The P7,500,000 note receivable is dated May 1, 2020, bears
interest at 9% and represents the balance of the consideration
received from the sale of an idle building to Solid Company.
Principal payments of P2,500,000 plus interest are due
annually beginning May 1, 2021. Solid Company made the
first principal and interest payment on May 1, 2021.
The P2,000,000 note receivable is dated December 31, 2018,
bears interest at 8% and is due on December 31, 2023.
The note is due from the president of Remarkable Company.
Interest is payable annually on December 31 and all interest
payments were made through December 31, 2021.
On July 1, 2021, Remarkable Company sold a parcel of land
to Boom Company for P4,000,000 under an installment sale
contract.
Boom Company made a P1,200,000 cash down payment…
You discovered the following errors in connection with your examination of the
Chapter 6 - Correction of Errors
PROBLEM 6-2 Counterbalancing Errors
You discovered the following errors in connection with your examination of the
financial statements of Jane Corporation:
Accrued rent expense of P10,000 was not recorded at the end of 2020.
2) Accrued interest receivable of P15.000 was not recorded at the end of 2020.
3)
1)
S) The company paid one-year insurance premium of P24,000 effective April 1
2020. The entire amount was debited to expense account and no adjustment
was made at the end of 2020.
4) The company leased a portion of its building for P48,000. The term of the
lease is one year ending April 30, 2021. Collection of rent was credited to rent
revenue account. At the end of 2020, no entry was made to take up the
unearned portion of the amount collected.
The following data were extracted from the financial statements of Jane
Corporation:
2020
2021
100,000
300,000
100,000
Net income…
Brief Exercise 8-03 a-b
At the end of 2021, Larkspur Co. has accounts receivable of $675,100 and an allowance for doubtful accounts of $24,370. On January 24, 2022, it is learned that the company’s receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,127.(a)Prepare the journal entry to record the write-off. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
Enter an account title
Enter a debit amount
Enter a credit amount
Enter an account title
Enter a debit amount
Enter a credit amount
(b)What is the cash realizable value of the accounts receivable before the write-off and after the write-off?
Before Write-Off
After Write-Off
Cash realizable value
$Enter a dollar amount
$Enter a dollar amount
Chapter 2 Solutions
Survey Of Accounting
Ch. 2 - 1. What does accrual accounting attempt to...Ch. 2 - 2. Define recognition. How is it independent of...Ch. 2 - 3. What does the term deferral mean?Ch. 2 - 4. If cash is collected in advance of performing...Ch. 2 - Prob. 5QCh. 2 - 6. What effect does the issue of common stock have...Ch. 2 - 7. How does the recognition of revenue on account...Ch. 2 - 8. Give an example of an asset source transaction....Ch. 2 - 9. When is revenue recognized under accrual...Ch. 2 - 10. Give an example of an asset exchange...
Ch. 2 - 11. What is the effect on the right side of the...Ch. 2 - Prob. 12QCh. 2 - Prob. 13QCh. 2 - Prob. 14QCh. 2 - Prob. 15QCh. 2 - Prob. 16QCh. 2 - 17. Why may net cash flow from operating...Ch. 2 - Prob. 18QCh. 2 - Prob. 19QCh. 2 - 20. What is the difference between a cost and an...Ch. 2 - Prob. 21QCh. 2 - Prob. 22QCh. 2 - 23. What does the term expense mean?Ch. 2 - Prob. 24QCh. 2 - 25. What is the purpose of the statement of...Ch. 2 - Prob. 26QCh. 2 - 27. Why is the balance sheet dated as of a...Ch. 2 - 28. In what order are assets listed on the balance...Ch. 2 - Prob. 29QCh. 2 - Prob. 30QCh. 2 - 31. What types of accounts are closed at the end...Ch. 2 - 32. Give several examples of period costs.Ch. 2 - 33. Give an example of a cost that can be directly...Ch. 2 - Prob. 34QCh. 2 - Prob. 1ECh. 2 - Exercise 2-2 Effect of accrued expenses on the...Ch. 2 - Prob. 3ECh. 2 - Prob. 4ECh. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - Prob. 7ECh. 2 - Prob. 8ECh. 2 - Exercise 2-9 Supplies on financial statements Yard...Ch. 2 - Prob. 10ECh. 2 - Exercise 2-11 Prepaid items on financial...Ch. 2 - Exercise 2-12 Effect of an error on financial...Ch. 2 - Exercise 2-13 Unearned items on financial...Ch. 2 - Prob. 14ECh. 2 - Prob. 15ECh. 2 - Prob. 16ECh. 2 - Prob. 17ECh. 2 - Prob. 18ECh. 2 - Prob. 19ECh. 2 - Prob. 20ECh. 2 - Exercise 2-21 Adjusting the accounts Norell Inc....Ch. 2 - Prob. 22ECh. 2 - Prob. 23ECh. 2 - Prob. 24ECh. 2 - Prob. 25ECh. 2 - Prob. 26ECh. 2 - Exercise 2-27 Identifying transaction type and...Ch. 2 - Exercise 2-27A Effect of accounting events on the...Ch. 2 - Prob. 29ECh. 2 - Exercise 2-29A Identifying source, use, and...Ch. 2 - Prob. 31ECh. 2 - Problem 2-32 Recording events in a horizontal...Ch. 2 - Problem 2-37A Effect of adjusting entries on the...Ch. 2 - Prob. 34PCh. 2 - Prob. 35PCh. 2 - Problem 2-36 Identifying and arranging elements on...Ch. 2 - Problem 2-37 Missing information in financial...Ch. 2 - Problem 2-38 Events for two complete accounting...Ch. 2 - Prob. 1ATCCh. 2 - ATC 2-3 Research Assignment Identifying accruals...Ch. 2 - ATC 2-4 Writing Assignment Revenue Recognition and...
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