In late 2020, Confused Corporation identified the following errors that were made and reflected on its...
In late 2020, Confused Corporation identified the following errors that were made and reflected on its 2019 income statement and other financial statements. This combination of errors is material. a) $5 million in revenue was recorded during 2019 that was not earned as of 12/31/2019. In fact, as of late 2020, this $5 million has still not been earned. b) Confused failed to record 2019 depreciation expense of $3 million. Other information for Confused: an income tax rate of 0%; 2020 net income of $10 million; $1 million in dividends declared and paid during 2020; and $20 million of retained earnings originally reported on its 12/31/2019 balance sheet. REQUIREMENTS 1. Assume you are now an employee of Confused. Prepare appropriate journal entries to correct these errors that you discovered in late 2020. 2. Prepare a schedule reconciling Confused 12/31/2019 retained earnings as originally reported to the amount that should be reported on its 12/31/2020 balance sheet.
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In late 2020, Confused Corporation identified the following
errors that were made and reflected on its...
During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated...
During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts: 2019 understated by $ 124,000 2020 overstated by 154,000 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, 2021, before any adjustments. (Ignore income taxes.) 2. Prepare a journal entry to correct the errors.
Bramble Corporation has retained earnings of $697,600 at January 1, 2020. Net income during 2020 was...
Bramble Corporation has retained earnings of $697,600 at January 1, 2020. Net income during 2020 was $1,692,900, and cash dividends declared and paid during 2020 totaled $81,700. Prepare a retained earnings statement for the year ended December 31 2020. Assume an error was discovered: land costing $88,590 (net of tax) was charged to maintenance and repairs expense in 2019. (List items that increase retained earnings first.) BRAMBLE CORPORATION Retained Earnings Statement For the Year Ended December 31, 2020 Retained Earnings,...
Coronado Corporation has retained earnings of $723,800 at January 1, 2020. Net income during 2020 was...
Coronado Corporation has retained earnings of $723,800 at January 1, 2020. Net income during 2020 was $1406,200, and cash dividends declared and paid durine 2020 totaled $79,200. Prepare a retained earnings statement for the year ended December 31, 2020. Assume an error was discovered: land costing $89,860 (net of tax) was charged to maintenance and repairs expense in 2019. (List Items that increase retained earnings first) support CORONADO CORPORATION Retained Earnings Statement For the Year Ended December 31, 2020 Retained...
During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated...
During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts: understated by 2019 $138,000 168,000 overstated by 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. (lgnore income taxes) 2. Prepare a journal entry to correct the errors. Complete this question by entering your answers in the tabs...
Teal Tool Company's December 31 year-end financial statements contained the following errors. December 31, 2020 December...
Teal Tool Company's December 31 year-end financial statements contained the following errors. December 31, 2020 December 31, 2021 $10,100 understated $7,700 overstated Ending inventory Depreciation expense $2,400 understated An insurance premium of $68,100 was prepaid in 2020 covering the years 2020, 2021, and 2022. The entire amount was charged to expense in 2020. In addition, on December 31, 2021, fully depreciated machinery was sold for $13,900 cash, but the entry was not recorded until 2022. There were no other errors...
Eddie Zambrano Corporation began operations on January 1, 2017. During its first 3 years of operations,...
Eddie Zambrano Corporation began operations on January 1, 2017. During its first 3 years of operations, Zambrano reported net income and declared dividends as follows: Net income Dividends declared 2017 $40,000 $ –0– 2018 125,000 50,000 2019 160,000 50,000 The following information relates to 2020. Income before income tax $240,000 Understatement of 2018 depreciation expense (before taxes) $25,000 Cumulative decrease in income from change in inventory methods (before taxes) $35,000 Dividends declared $100,000 Effective tax rate 20 % 1. Instructions:...
Metlock Corporation has retained earnings of $681,500 at January 1, 2020. Net income during 2020 was...
Metlock Corporation has retained earnings of $681,500 at January 1, 2020. Net income during 2020 was $1,434,800, and cash dividends declared and paid during 2020 totaled $81,300. Prepare a retained earnings statement for the year ended December 31, 2020. Assume an error was discovered: land costing $88,800 (net of tax) was charged to maintenance and repairs expense in 2019. (List items that increase retained earnings first.)
Sheffield Corporation has retained earnings of $698,400 at January 1, 2020. Net income during 2020 was...
Sheffield Corporation has retained earnings of $698,400 at January 1, 2020. Net income during 2020 was $1,666,300, and cash dividends declared and paid during 2020 totaled $81,300. Prepare a retained earnings statement for the year ended December 31, 2020. Assume an error was discovered: land costing $87,890 (net of tax) was charged to maintenance and repairs expense in 2019. (List items that increase retained earnings first.) Create an Retained Earnings Statement.
2. The post-closing trial balance of Harmon Corporation as of December 31, 2020, contains the following...
2. The post-closing trial balance of Harmon Corporation as of December 31, 2020, contains the following stockholders' equity accounts. $ Preferred Stock (15,000 shares issued) Common Stock (250,000 shares issued) Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Par-Common Stock Common Stock Dividends Distributable Retained Earnings 750,000 2,500,000 250,000 400,000 250,000 ??? The following items were revealed during a review of the accounting records. a. No errors were made during the recording of 2020 transactions of...
The post-closing trial balance of Harmon Corporation as of December 31, 2020, contains the following stockholders’...
The post-closing trial balance of Harmon Corporation as of December 31, 2020, contains the following stockholders’ equity accounts. Preferred Stock (15,000 shares issued) - $750,000 Common Stock (250,000 shares issued) - 2,500,000 Paid-in Capital in Excess of Par-Preferred Stock - 250,000 Paid-in Capital in Excess of Par-Common Stock - 400,000 Common Stock Dividends Distributable - 250,000 Retained Earnings - ??? The following items were revealed during a review of the accounting records. a. No errors were made during the recording...
Bramble Corporation has retained earnings of $697,600 at January 1, 2020. Net income during 2020 was $1,692,900, and cash dividends declared and paid during 2020 totaled $81,700. Prepare a retained earnings statement for the year ended December 31 2020. Assume an error was discovered: land costing $88,590 (net of tax) was charged to maintenance and repairs expense in 2019. (List items that increase retained earnings first.) BRAMBLE CORPORATION Retained Earnings Statement For the Year Ended December 31, 2020 Retained Earnings,...
Coronado Corporation has retained earnings of $723,800 at January 1, 2020. Net income during 2020 was $1406,200, and cash dividends declared and paid durine 2020 totaled $79,200. Prepare a retained earnings statement for the year ended December 31, 2020. Assume an error was discovered: land costing $89,860 (net of tax) was charged to maintenance and repairs expense in 2019. (List Items that increase retained earnings first) support CORONADO CORPORATION Retained Earnings Statement For the Year Ended December 31, 2020 Retained...
During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts: understated by 2019 $138,000 168,000 overstated by 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. (lgnore income taxes) 2. Prepare a journal entry to correct the errors. Complete this question by entering your answers in the tabs...
Teal Tool Company's December 31 year-end financial statements contained the following errors. December 31, 2020 December 31, 2021 $10,100 understated $7,700 overstated Ending inventory Depreciation expense $2,400 understated An insurance premium of $68,100 was prepaid in 2020 covering the years 2020, 2021, and 2022. The entire amount was charged to expense in 2020. In addition, on December 31, 2021, fully depreciated machinery was sold for $13,900 cash, but the entry was not recorded until 2022. There were no other errors...
2. The post-closing trial balance of Harmon Corporation as of December 31, 2020, contains the following stockholders' equity accounts. $ Preferred Stock (15,000 shares issued) Common Stock (250,000 shares issued) Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Par-Common Stock Common Stock Dividends Distributable Retained Earnings 750,000 2,500,000 250,000 400,000 250,000 ??? The following items were revealed during a review of the accounting records. a. No errors were made during the recording of 2020 transactions of...
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