During 2016, the accountant discovered that the physical inventory at the end of 2015 had been...
- During 2016, the accountant discovered that the physical inventory at the end of 2015 had been understated by 42,750. Instead of correcting the error, however, the accountant assumed that the error would balance out (correct itself) in 2016.
Are there any flaws in the accountant’s assumption? Explain
Homework Answers
The accountant assumption is incorrect. If an error is discovered which affect the prior period, it should be corrected by recording the correction journal entry as follow:
Debit Inventory $42750
Credit Owner's capital/Retained earnings $42750
The accountant did not record the above entry as a result of which inventory and cost of goods sold in 2016 was also misstate.
Add Answer to:
During 2016, the accountant discovered that the physical
inventory at the end of 2015 had been...
hory at December 31, 2015 was $90,000 based on a physical count efore any necessary year-end...
hory at December 31, 2015 was $90,000 based on a physical count efore any necessary year-end adjustment relating to the following: 23) Marsha Company's inventory at December of goods priced at cost, and before any necessary yea $2,000 in goods that were sold by in goods that were sold by Marsha and shipped on December 3 2015; the goods were received by the were FOB destination. $1,000 in goods that were purchased by M were received by the customer on...
Cage Trading Inc. counted $2,000 of inventory twice during its December 31, 2016 physical inventory count....
Cage Trading Inc. counted $2,000 of inventory twice during its December 31, 2016 physical inventory count. Its December 31, 2017 inventory amount is correct. As a result of this error, 2016 ending inventory is overstated by $2,000. 2016 income is understated by $2,000. 2017 income is overstated by $2,000. 2017 cost of goods sold is understated by $2,000. Question 4 2 pts Kemp Clothing has cost of goods sold of $14,000 with beginning and ending inventories of $4.000 and $2,000....
After preparing an unadjusted trial balance at year-end, the accountant for Chu Design Company discovered the...
After preparing an unadjusted trial balance at year-end, the accountant for Chu Design Company discovered the following errors: 1) The payment of the $225 telephone bill for December was recorded twice 2) The payment of a $1,000 note payable was recorded as a debit to Cash and a debit to Notes Payable 3) A $900 withdrawal by the owner was recorded to the correct accounts as $90 4) An additional investment of $5,000 by the owner was recorded as a...
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies...
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20Y8, Fonda Motorcycle Shop incorrectly counted its inventory as $229,310 instead of the correct amount of $220,140. Enter all amounts as positive numbers. a. State the effect of the error on the December 31, 20Y8, balance sheet of Fonda Motorcycle Shop. Balance Sheet Items Overstated/Understated Amount Merchandise Inventory $ Current Assets Total...
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies...
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20Y8, Fonda Motorcycle Shop incorrectly counted its inventory as $242,240 instead of the correct amount of $232,550. Enter all amounts as positive numbers. a. State the effect of the error on the December 31, 20Y8, balance sheet of Fonda Motorcycle Shop. Balance Sheet Items Overstated/Understated Amount Merchandise Inventory $ Current Assets Total...
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies...
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20Y8, Fonda Motorcycle Shop incorrectly counted its inventory as $405,610 instead of the correct amount of $389,390. Enter all amounts as positive numbers. a. State the effect of the error on the December 31, 20Y8, balance sheet of Fonda Motorcycle Shop. Balance Sheet Items Overstated/Understated Amount Merchandise Inventory $ Current Assets Total...
1. 2. 3. In 2018, Internal auditors discovered that Fay, Inc., had debited an expense account for the $3,900,000 cost...
1.
2.
3.
In 2018, Internal auditors discovered that Fay, Inc., had debited an expense account for the $3,900,000 cost of a machine purchased on January 1, 2015. The machine's useful life was expected to be 20 years with no residual value. Straight-line depreciation is used by Fay. The Journal entry to correct the error will include a credit to accumulated depreciation of Multiple Choice 0 $585.000 O $195,000 O $3.900.000 o $390,000 Berkshire Inc. uses a periodic Inventory system....
Before making the year end adjustments to the company's December 31, 2017 financial new accountant of Phoenix Corpo...
Before making the year end adjustments to the company's December 31, 2017 financial new accountant of Phoenix Corporation discovered the following errors made statements, the by the previous accountant: 1. A property acquisition made on July 1, 2014 in the amount of $260,000 was recorded entirely to the Land account, instead of being of allocated between Land at $60,000 and Building at $200,000. The company's practice is to depreciate buildings straight line over 40 years with a full year's depreciation...
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies...
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20Y8, Fonda Motorcycle Shop incorrectly counted its inventory as $324,140 instead of the correct amount of $311,170. Enter all amounts as positive numbers. a. State the effect of the error on the December 31, 20Y8, balance sheet of Fonda Motorcycle Shop. Balance Sheet Items Overstated/Understated Amount Merchandise Inventory Current Assets Total Assets...
Effect of Errors in Physical Inventory Fonda Motorcyde Shop sells motorcydes, ATVs, and other related supplies...
Effect of Errors in Physical Inventory Fonda Motorcyde Shop sells motorcydes, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20YB, Fonda Motorcycle Shop incorrectly counted its inventory as $431,390 instead of the correct amount of $414,130. Enter all amounts as positive numbers. a. State the effect of the error on the December 31, 20Y8, balance sheet of Fonda Motorcycle Shop Balance Sheet Items Overstated/Understated Amount Merchandise Inventory Current Assets Total Assets...
hory at December 31, 2015 was $90,000 based on a physical count efore any necessary year-end adjustment relating to the following: 23) Marsha Company's inventory at December of goods priced at cost, and before any necessary yea $2,000 in goods that were sold by in goods that were sold by Marsha and shipped on December 3 2015; the goods were received by the were FOB destination. $1,000 in goods that were purchased by M were received by the customer on...
Cage Trading Inc. counted $2,000 of inventory twice during its December 31, 2016 physical inventory count. Its December 31, 2017 inventory amount is correct. As a result of this error, 2016 ending inventory is overstated by $2,000. 2016 income is understated by $2,000. 2017 income is overstated by $2,000. 2017 cost of goods sold is understated by $2,000. Question 4 2 pts Kemp Clothing has cost of goods sold of $14,000 with beginning and ending inventories of $4.000 and $2,000....
After preparing an unadjusted trial balance at year-end, the accountant for Chu Design Company discovered the following errors: 1) The payment of the $225 telephone bill for December was recorded twice 2) The payment of a $1,000 note payable was recorded as a debit to Cash and a debit to Notes Payable 3) A $900 withdrawal by the owner was recorded to the correct accounts as $90 4) An additional investment of $5,000 by the owner was recorded as a...
1.
2.
3.
In 2018, Internal auditors discovered that Fay, Inc., had debited an expense account for the $3,900,000 cost of a machine purchased on January 1, 2015. The machine's useful life was expected to be 20 years with no residual value. Straight-line depreciation is used by Fay. The Journal entry to correct the error will include a credit to accumulated depreciation of Multiple Choice 0 $585.000 O $195,000 O $3.900.000 o $390,000 Berkshire Inc. uses a periodic Inventory system....
Before making the year end adjustments to the company's December 31, 2017 financial new accountant of Phoenix Corporation discovered the following errors made statements, the by the previous accountant: 1. A property acquisition made on July 1, 2014 in the amount of $260,000 was recorded entirely to the Land account, instead of being of allocated between Land at $60,000 and Building at $200,000. The company's practice is to depreciate buildings straight line over 40 years with a full year's depreciation...
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20Y8, Fonda Motorcycle Shop incorrectly counted its inventory as $324,140 instead of the correct amount of $311,170. Enter all amounts as positive numbers. a. State the effect of the error on the December 31, 20Y8, balance sheet of Fonda Motorcycle Shop. Balance Sheet Items Overstated/Understated Amount Merchandise Inventory Current Assets Total Assets...
Effect of Errors in Physical Inventory Fonda Motorcyde Shop sells motorcydes, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20YB, Fonda Motorcycle Shop incorrectly counted its inventory as $431,390 instead of the correct amount of $414,130. Enter all amounts as positive numbers. a. State the effect of the error on the December 31, 20Y8, balance sheet of Fonda Motorcycle Shop Balance Sheet Items Overstated/Understated Amount Merchandise Inventory Current Assets Total Assets...
Most questions answered within 3 hours.
-
A solid, frictionless cylindrical reel of mass M=5.00kg and
radius R=0.55m is used to draw water...
asked 1 minute ago -
how do radio waves get emitted from Jupiter?
- do they come from radiation from planet...
asked 2 minutes ago -
The test statistic used in the F test for the equality of two
variances is calculated...
asked 13 minutes ago -
How does neutralisation of IL-6 trans-signaling affect the
autoimmune disease and inflammation? What if the trans-signaling...
asked 4 minutes ago -
f an allele is 'fixed' in a population, what is its
frequency?
0.50
0.75
0.25
0...
asked 18 minutes ago -
Do we have a duty of national loyalty in business? What is the
major argument in...
asked 18 minutes ago -
compare the international treatment of segment reporting to the
us gaap treatment
asked 15 minutes ago -
A statistics student finds herself struggling with a newspaper
article stating that only eighteen percent of...
asked 48 minutes ago -
People with beriberi, a disease caused by a thiamin deficiency,
have elevated levels of blood pyruvate...
asked 35 minutes ago -
PYTHON Programming Exercise 2: Create a Simple Cost Calculator
Write a program that displays input fields...
asked 41 minutes ago -
1.Seki agreed that Groupon could sell 18 hot air
balloon rides on his Magical Adventures company...
asked 42 minutes ago -
A cohort study is conducted to determine whether smoking is
associated with an increased risk of...
asked 47 minutes ago