For the year ending August 31, Mammalia Medical Co. mistakenly omitted adjusting entries for (1) depreciation of $5,800, (2) fees earned that were not billed of $44,500, and (3) accrued wages of $7,300. Indicate the effect of the errors on (a) revenues, (b) expenses, and (c) net income for the year ended August 31.
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For the year ending August 31, Mammalia Medical Co. mistakenly omitted
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- Ray Company, your client, failed to record accrued rent income of P 25,000 as of December 31, 2022. Based on the foregoing, answer the following questions: Question 1: Which of the following accounts is(are) understated by P 25,000 at the end of year 2022 as a result of the error? Question 2: Which of the following accounts is(are) overstated by P 25,000 at the end of year 2023 as a result of the error? Question 3: What would be the adjusting entry if the error is discovered in year 2022? Question 4: What would be the adjusting entry if the error is discovered in year 2023? Question 5: What would be the adjusting entry if the error is discovered in year 2024?Prepare the adjusting journal entries to record the credit losses for the following independent situations. Required: (Explanation for the journal entry is NOT required.) a. The Allowance for Impairment has a S1,500 credit balance prior to adjustment. Net credit sales during the year are $425,000 and 4% are estimated to be uncollectible. Assume the income statement approach is used. b. The Allowance for Impairment has a $300 debit balance prior to adjustment. Based on an aging schedule of accounts receivable prepared on December 31, $18,100 of accounts receivable are estimated to be uncollectible. Assume the statement of financial position approach is used. c. Explain how the transaction in (b) affects the accounting equation.Solstice Company determines on October 1 that it cannot collect $61,000 of its accounts receivable from its customer, P. Moore. Apply the direct write-off method to record this loss as of October 1.
- At the end of the current year, using the aging of receivable method, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $375. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?your client, failed to record accrued salaries expense of P 50,000 as of December 31, 2022. Based on the foregoing, answer the following questions: Question 1: Which of the following accounts is(are) understated by P 50,000 at the end of year 2022 as a result of the error? Question 2: Which of the following accounts is(are) overstated by P 50,000 at the end of year 2023 as a result of the error? Question 3: What would be the adjusting entry if the error is discovered in year 2022? Question 4: What would be the adjusting entry if the error is discovered in year 2023? Question 5: What would be the adjusting entry if the error is discovered in year 2024?Which of the following is not a counterbalancing error? Non-recognition of the unused portion of office supplies at year end. Omission of accrued interest expense at year end. Non-recording at year end of rent already earned but uncollected. Overstatement of depreciation for the current year.
- At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $764. During the year, previously written off accounts of $140 are reinstated and accounts totaling $736 are written off as uncollectible. The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts should be?At the beginning of the year, the balance in the Allowance for Doubtful Accounts is a credit of $559. During the year, $349 of previously written off accounts were reinstated and accounts totaling $837 are written off as uncollectible. The end-of-year balance (before adjustment) in the Allowance for Doubtful Accounts should be the one listed below. a.$349 b.$71 c.$559 d.$837Milan Company reported pretax income of P 6,500,000 on December 31, 2021. During your audit, the following errors were revealed: Insurance premium covering the period from July 1, 2021 to July 1, 2022, amounting to P 200,000 was paid and recorded as expense on July 31, 2021. The client did not make any adjustment at year end. Advertising for December 2021, amounting to P 500,000, was recorded when payment was made in January 2022. Merchandise worth P 1,000,000 was purchased in 2021 and included in ending inventory. However, the purchase was recorded only in 2022. On November 1, 2021, the P 300,000 was received representing rent of an equipment applicable for six months. Upon receipt, the entire amount was credited to income account. A merchandise valued at P 1,500,000 was properly recorded as purchase at year-end. Since the merchandise was still at the port area, it was inadvertently omitted from the inventory on December 31, 2021. What is the corrected pretax income for the year…
- Milan Company reported pretax income of P 6,500,000 on December 31, 2021. During your audit, the following errors were revealed: Insurance premium covering the period from July 1, 2021 to July 1, 2022, amounting to P 200,000 was paid and recorded as expense on July 31, 2021. The client did not make any adjustment at year end. Advertising for December 2021, amounting to P 500,000, was recorded when payment was made in January 2022. Merchandise worth P 1,000,000 was purchased in 2021 and included in ending inventory. However, the purchase was recorded only in 2022. On November 1, 2021, the P 300,000 was received representing rent of an equipment applicable for six months. Upon receipt, the entire amount was credited to income account. A merchandise valued at P 1,500,000 was properly recorded as purchase at year-end. Since the merchandise was still at the port area, it was inadvertently omitted from the inventory on December 31, 2021. What is the corrected pretax income for the year…At the end of the current year, using the aging of receivable method, management estimated that $24,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a credit balance of $465. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?Solstice Company determines on October 1 that it cannot collect $61,000 of its accounts receivable from its customer, P. Moore. Apply the direct write-off method to record this loss as of October 1. Record the write off an account.