1) Using the same information in the previous problem, now assume that, in addition to the...
1) Using the same information in the previous problem, now assume that, in addition to the previously described inventory errors, depreciation expense was understated by 15,000 in 2015 and overstated by 20,000 in 2016. By what amount should beginning R.E. balance be adjusted on 1/1/17?
2)In 2015, Epsilon incorrectly recorded ending inventory as $970,000 instead of $790,000. The error was discovered on 1/1/16. Tax rates for all years is 40%. By what amount and direction (increase or decrease) should R.E. be adjusted on 1/1/16?
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1) Using the same information in the previous problem, now
assume that, in addition to the...
1) Janes Company incorrectly omitted $50,000 of merchandise from its 2010 ending inventory. In addition, a...
1) Janes Company incorrectly omitted $50,000 of merchandise from its 2010 ending inventory. In addition, a merchandise purchase of $20,000 was incorrectly recorded as $2,000 in the purchases account. As a result of these errors, 2010 income (before taxes) is: a) overstated by $32,000. b) understated by $32,000. c) overstated by $68,000 d) understated by $68,000.
Poppy Co. uses a periodic inventory system. Beginning inventory on January 1 was understated by $31,400,...
Poppy Co. uses a periodic inventory system. Beginning inventory on January 1 was understated by $31,400, and its ending inventory on December 31 was understated by $16,300. In addition, a purchase of merchandise costing $20,500 was incorrectly recorded as a $2,050 purchase. None of these errors were discovered until the next year. As a result, Poppy's cost of goods sold for this year was: Multiple Choice Understated by $49,850. Overstated by $3,350. Understated by $33,550. Overstated by $33,550.
Problem 22-3 Splish Inc. was organized in late 2015 to manufacture and sell hosiery. At the...
Problem 22-3
Splish Inc. was organized in late 2015 to manufacture and sell
hosiery. At the end of its fourth year of operation, the company
has been fairly successful, as indicated by the following reported
net incomes.
2015
$139,000a
2017
$206,000
2016
162,000b
2018
279,000
a Includes a $10,000 increase because
of change in bad debt experience rate.
b Includes a gain of $30,000.
The company has decided to expand operations and has applied for a
sizable bank loan. The...
The December 31, 2018, inventory of Tog Company, based on a physical count, was determined to be $450,000. Included in...
The December 31, 2018, inventory of Tog Company, based on a physical count, was determined to be $450,000. Included in that count was a shipment of goods received from a supplier at the end of the month that cost $50,000. The purchase was recorded and paid for in 2019. Another supplier shipment costing $20,000 was correctly recorded as a purchase in 2018. However, the merchandise, shipped FOB shipping point, was not received until 2019 and was incorrectly omitted from the...
Problem 20-14 Errors; change in estimate; change in principle; restatement of previous financial statements [LO 20-1,...
Problem 20-14 Errors; change in estimate; change in principle; restatement of previous financial statements [LO 20-1, 20-3, 20-4, 20-6] Whaley Distributors is a wholesale distributor of electronic components. Financial statements for the years ended December 31, 2016 and 2017 reported the following amounts and subtotals ($ in millions Assets $650 730 liabilities $285 Shareholders' Equity $365 2016 2017 Net Income $165 185 Expenses $141 166 375 In 2018 the following situations occurred or came to light a. Internal auditors discovered...
Problem 9-17 Integrating problem; Chapters 8 and 9; inventory errors [LO9-7] Capwell Corporation uses a periodic...
Problem 9-17 Integrating problem; Chapters 8 and 9; inventory errors [LO9-7] Capwell Corporation uses a periodic inventory system. The company's ending inventory on December 31, 2018, its fiscal-year end, based on a physical count, was determined to be $330,000. Capwell's unadjusted trial balance also showed the following account balances: Purchases, $660,000; Accounts payable; $230,000; Accounts receivable, $245,000; Sales revenue, $840,000. The internal audit department discovered the following items: Goods valued at $36,000 held on consignment from Dix Company were included...
Correction of Errors Hinckley Company is in the process of adjusting its books at the end...
Correction of Errors Hinckley Company is in the process of adjusting its books at the end of 20Y3. Hinckley's records reveal the following information: a. Hinckley failed to accrue sales commissions at the end of 20Y1 and 20Y2 as follows: 2011............................................................................... $22,000 2012................................................................................ 14.250 In each case, the sales commissions were paid (and expensed) in January of the following year. e b. Errors in ending inventories for the last three years were discovered to be as follows: 2011.................................................... .. $41,300...
1. 2. In the previous year, a firm failed to record premium amortization of $41,900 and...
1.
2.
In the previous year, a firm failed to record premium amortization of $41,900 and $29,600, respectively, on its bonds payable and held to maturity bond Investments. These errors affect both Income before tax and taxable income. The firm's tax rate is 30%. As a result of this error, net Income was: Multiple Choice O Overstated by $8.610. O Understated by $33.290. O Understated by $8.610. O Overstated by $33.290. Williams-Santana, Inc., is a manufacturer of high-tech industrial parts...
1. Harlequin Co. has used the LIFO retail method since it began op...
1. Harlequin Co. has used the LIFO retail method since it began operations in early 2015 (its base year). Its beginning inventory for 2016 was $36,000 at cost and $72,000 at retail prices. At the end of 2016, it computed its estimated ending inventory at retail to be $120,000. Assuming its cost-to-retail percentage for 2016 transactions was 60%, what is the inventory balance that Harlequin Co. would report in its 12/31/16 balance sheet? Hint: $64,800 2. Using the data from...
8) Kaniper Company has the following balances at December 31, 2017 Cash in checking account $15,000...
8) Kaniper Company has the following balances at December 31, 2017 Cash in checking account $15,000 Petty cash 250 Check from customer dated 01/31/2018 350 Certificates of Deposits, maturing in 1-5 years 250,000 US Treasury bill purchased 12/1/2017, maturing 2/20/2018 40,000 US Treasury bill purchased 3/1/2017, maturing 1/20/2018 36,000 Cash in bond sinking fund account 60,000 Kaniper's policy is to treat as cash equivalents all highly liquid investments with a maturity of three months or less when purchased. What amount...
Problem 22-3
Splish Inc. was organized in late 2015 to manufacture and sell
hosiery. At the end of its fourth year of operation, the company
has been fairly successful, as indicated by the following reported
net incomes.
2015
$139,000a
2017
$206,000
2016
162,000b
2018
279,000
a Includes a $10,000 increase because
of change in bad debt experience rate.
b Includes a gain of $30,000.
The company has decided to expand operations and has applied for a
sizable bank loan. The...
The December 31, 2018, inventory of Tog Company, based on a physical count, was determined to be $450,000. Included in that count was a shipment of goods received from a supplier at the end of the month that cost $50,000. The purchase was recorded and paid for in 2019. Another supplier shipment costing $20,000 was correctly recorded as a purchase in 2018. However, the merchandise, shipped FOB shipping point, was not received until 2019 and was incorrectly omitted from the...
Problem 20-14 Errors; change in estimate; change in principle; restatement of previous financial statements [LO 20-1, 20-3, 20-4, 20-6] Whaley Distributors is a wholesale distributor of electronic components. Financial statements for the years ended December 31, 2016 and 2017 reported the following amounts and subtotals ($ in millions Assets $650 730 liabilities $285 Shareholders' Equity $365 2016 2017 Net Income $165 185 Expenses $141 166 375 In 2018 the following situations occurred or came to light a. Internal auditors discovered...
Correction of Errors Hinckley Company is in the process of adjusting its books at the end of 20Y3. Hinckley's records reveal the following information: a. Hinckley failed to accrue sales commissions at the end of 20Y1 and 20Y2 as follows: 2011............................................................................... $22,000 2012................................................................................ 14.250 In each case, the sales commissions were paid (and expensed) in January of the following year. e b. Errors in ending inventories for the last three years were discovered to be as follows: 2011.................................................... .. $41,300...
1.
2.
In the previous year, a firm failed to record premium amortization of $41,900 and $29,600, respectively, on its bonds payable and held to maturity bond Investments. These errors affect both Income before tax and taxable income. The firm's tax rate is 30%. As a result of this error, net Income was: Multiple Choice O Overstated by $8.610. O Understated by $33.290. O Understated by $8.610. O Overstated by $33.290. Williams-Santana, Inc., is a manufacturer of high-tech industrial parts...
8) Kaniper Company has the following balances at December 31, 2017 Cash in checking account $15,000 Petty cash 250 Check from customer dated 01/31/2018 350 Certificates of Deposits, maturing in 1-5 years 250,000 US Treasury bill purchased 12/1/2017, maturing 2/20/2018 40,000 US Treasury bill purchased 3/1/2017, maturing 1/20/2018 36,000 Cash in bond sinking fund account 60,000 Kaniper's policy is to treat as cash equivalents all highly liquid investments with a maturity of three months or less when purchased. What amount...
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