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| O'Brian Co. | |
| If $ 10,000 rent revenue is collected and recorded in 2021 but this actually pertains to 2022 then it means it is an advance against rent revenue of 2022. It should be shown as Unearned rent revenue in the liability side. If the error done by O'Brian is not corrected then it would have following effects: | |
| Assets: | NO effect. Because cash received has been properly recorded. |
| Liabilities: | It is understated because Unearned revenue is not shown. |
| Owners Equity: | It is overstated because income has increase due to this unearned revenue. |
| Net Income: | It is overstated because income has increase due to this unearned revenue. |
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U Am p el -Vercon Date ta you are reviewing O'Brian Co.'s adjusted trial balance for...
Chapter 2 You are reviewing O'Brian Co.'s adjusted trial balance for the year ended 12/31/16. You...
Chapter 2 You are reviewing O'Brian Co.'s adjusted trial balance for the year ended 12/31/16. You notice several omissions and incorrect items during your review, some of which are noted below. For each one, you are to determine what effect, if any, these items would have on the stated components of O'Brian Co's 2016 Income Statement and 12/31/16 Balance Sheet if they are not corrected or updated. Assume no income taxes, Use the following code for your answers. You need...
You are reviewing O'Brian Co.'s adjusted trial balance for the year ended 12/31/2021. You notice several...
You are reviewing O'Brian Co.'s adjusted trial balance for the year ended 12/31/2021. You notice several omissions and incorrect items during your review, some of which are noted below. For each one, you are to determine what effect, if any, these items would have on the stated components of O'Brian Co.'s 2021 Income Statement and 12/31/2021 Balance Sheet if they are not corrected or updated. Assume no income taxes. What is the effect on Assets, Liabilities, owners equity if rent...
Suppose that Laramie Company’s adjusted trial balance ignored the following information. For each item, indicate what...
Suppose that Laramie Company’s adjusted trial balance ignored the following information. For each item, indicate what effects, if any, these omissions would have on the stated components of Laramie Company's 2021 Income Statement and 12/31/2021 Balance Sheet. Assume no income taxes. Additional Information: $4,500 in cash dividends declared and paid in December 2021 were unrecorded. 12/31/2021 Assets amount: No effect, Understated, Overstated: 12/31/2021 Liabilities amount: No effect, understated, overstated: amount: 12/31/2021 Owners’ Equity amount: No effect, understated, overstated: 2021 Net...
Overstated, Understated, or No effect Suppose that Laramie Company's adjusted trial balance ignored the following information....
Overstated, Understated, or No effect
Suppose that Laramie Company's adjusted trial balance ignored the following information. For each item, indicate what effects, if any, these omissions would have on the stated components of Laramie Company's 2021 Income Statement and 12/31/2021 Balance Sheet. Assume no income taxes. 12/31/2021 Assets 12/31/2021 Liabilities 12/31/2021 Owners' Equity Additional Information The estimated uncollectible accounts receivable is now zero and should be $31,000 2021 Net Income
Suppose that Laramie Company's adjusted trial balance ignored the following information. For each item, indicate what...
Suppose that Laramie Company's adjusted trial balance ignored the following information. For each item, indicate what effects, if any, these omissions would have on the stated components of Laramie Company's 2021 Income Statement and 12/31/2021 Balance Sheet. Assume no income taxes. 12/31/2021 Assets 12/31/2021 Liabilities 12/31/2021 Owners' Equity Additional Information $24,000 in depreciation on some equipment was still unrecorded. 2021 Net Income
During the course of your examination of the financial statements of the Hales Corporation for the...
During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2021, you discover the following: An insurance policy covering three years was purchased on January 1, 2021, for $3,300. The entire amount was debited to insurance expense and no adjusting entry was recorded for this item. During 2021, the company received a $600 cash advance from a customer for merchandise to be manufactured and shipped in 2022. The $600 was...
During the course of your examination of the financial statements of the Hales Corporation for the...
During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2021. you discover the following: a. An insurance policy covering three years was purchased on January 1, 2021, for $6,000. The entire amount was debited to insurance expense and no adjusting entry was recorded for this item. b. During 2021, the company received a $1.000 cash advance from a customer for merchandise to be manufactured and shipped in 2022. The...
The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for...
The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2021 ($ in thousands): sales revenue, $16,900; cost of goods sold, $7,000; selling expenses, $1,380; general and administrative expenses, $880; interest revenue, $140; interest expense, $200. Income taxes have not yet been recorded. The company’s income tax rate is 25% on all items of income or loss. These revenue and expense items appear in the company’s income statement every...
The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for...
The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2021 ($ in thousands): sales revenue, $18,700; cost of goods sold, $7,900; selling expenses, $1,470; general and administrative expenses, $970; interest revenue, $250; interest expense, $300. Income taxes have not yet been recorded. The company’s income tax rate is 25% on all items of income or loss. These revenue and expense items appear in the company’s income statement every...
The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for...
The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2021 ($ in thousands): sales revenue, $19,300; cost of goods sold, $8,200; selling expenses, $1,500; general and administrative expenses, $1,000; interest revenue, $280; interest expense, $320. Income taxes have not yet been recorded. The company’s income tax rate is 25% on all items of income or loss. These revenue and expense items appear in the company’s income statement every...
Chapter 2 You are reviewing O'Brian Co.'s adjusted trial balance for the year ended 12/31/16. You notice several omissions and incorrect items during your review, some of which are noted below. For each one, you are to determine what effect, if any, these items would have on the stated components of O'Brian Co's 2016 Income Statement and 12/31/16 Balance Sheet if they are not corrected or updated. Assume no income taxes, Use the following code for your answers. You need...
Overstated, Understated, or No effect
Suppose that Laramie Company's adjusted trial balance ignored the following information. For each item, indicate what effects, if any, these omissions would have on the stated components of Laramie Company's 2021 Income Statement and 12/31/2021 Balance Sheet. Assume no income taxes. 12/31/2021 Assets 12/31/2021 Liabilities 12/31/2021 Owners' Equity Additional Information The estimated uncollectible accounts receivable is now zero and should be $31,000 2021 Net Income
Suppose that Laramie Company's adjusted trial balance ignored the following information. For each item, indicate what effects, if any, these omissions would have on the stated components of Laramie Company's 2021 Income Statement and 12/31/2021 Balance Sheet. Assume no income taxes. 12/31/2021 Assets 12/31/2021 Liabilities 12/31/2021 Owners' Equity Additional Information $24,000 in depreciation on some equipment was still unrecorded. 2021 Net Income
During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2021. you discover the following: a. An insurance policy covering three years was purchased on January 1, 2021, for $6,000. The entire amount was debited to insurance expense and no adjusting entry was recorded for this item. b. During 2021, the company received a $1.000 cash advance from a customer for merchandise to be manufactured and shipped in 2022. The...
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