The reported net incomes for the first 2 years of Larkspur Products, Inc., were as follows:...
The reported net incomes for the first 2 years of Larkspur
Products, Inc., were as follows: 2017, $146,000; 2018, $191,100.
Early in 2019, the following errors were discovered.
| 1. | Depreciation of equipment for 2017 was overstated $16,400. | |
| 2. | Depreciation of equipment for 2018 was understated $36,700. | |
| 3. | December 31, 2017, inventory was understated $52,600. | |
| 4. | December 31, 2018, inventory was overstated $14,600. |
Prepare the correcting entry necessary when these errors are
discovered. Assume that the books are closed. (Ignore income tax
considerations.) (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the
amounts.)
|
Account Titles and Explanation |
Debit |
Credit |
|
|
|
|
|
|
|
|
|
|
|
|
Homework Answers
| Accounts Titles and Explanation | Debit | Credit | |
| Inventory | $38,000 | ($52,600 - $14,600) | |
| Accumulated depreciation | $20,300 | ($36,700 - $16,400) | |
| Retained Earnings | $17,700 | ||
| (To correct the error discovered) | |||
Add Answer to:
The reported net incomes for the first 2 years of Larkspur
Products, Inc., were as follows:...
The reported net incomes for the first 2 years of Larkspur Products, Inc., were as follows:...
The reported net incomes for the first 2 years of Larkspur
Products, Inc., were as follows: 2017, $146,000; 2018, $191,100.
Early in 2019, the following errors were discovered.
1.
Depreciation of equipment for
2017 was overstated $16,400.
2.
Depreciation of equipment for
2018 was understated $36,700.
3.
December 31, 2017, inventory
was understated $52,600.
4.
December 31, 2018, inventory
was overstated $14,600.
Prepare the correcting entry necessary when these errors are
discovered. Assume that the books are closed. (Ignore income...
The reported net incomes for the first 2 years of Larkspur Products, Inc., were as follows:...
The reported net incomes for the first 2 years of Larkspur
Products, Inc., were as follows: 2017, $134,900; 2018, $177,700.
Early in 2019, the following errors were discovered.
1.
Depreciation of equipment for
2017 was overstated $18,600.
2.
Depreciation of equipment for
2018 was understated $36,200.
3.
December 31, 2017, inventory
was understated $45,100.
4.
December 31, 2018, inventory
was overstated $17,600.
Prepare the correcting entry necessary when these errors are
discovered. Assume that the books are closed. (Ignore income...
The reported net incomes for the first 2 years of Coronado Products, Inc., were as follows:...
The reported net incomes for the first 2 years of Coronado
Products, Inc., were as follows: 2020, $147,800; 2021, $202,000.
Early in 2022, the following errors were discovered.
1.
Depreciation of equipment for
2020 was overstated $15,900.
2.
Depreciation of equipment for
2021 was understated $38,300.
3.
December 31, 2020, inventory
was understated $49,500.
4.
December 31, 2021, inventory
was overstated $14,900.
Prepare the correcting entry necessary when these errors are
discovered. Assume that the books are closed. (Ignore income...
Sparky, Inc. follows a calendar-year end. Its financial statements for the years 2018 and 2017 contained...
Sparky, Inc. follows a calendar-year end. Its financial statements for the years 2018 and 2017 contained errors as follows: Ending Inventory for 2017 was understated by $18,000 Ending Inventory for 2018 was overstated by $33,000 No correcting entries were made at December 31, 2018. Determine the following: a. Indicate the effect on 2018 Net Income (ignore taxes. Indicate O for Overstated; U for Understated; or NE for No Error. If your answer is overstated by $4,000, record your answer as...
Exercise 5-2 Error correction (LO5-2) Bettner, Inc., is a calendar-year corporation whose financial statements for 20X0...
Exercise 5-2 Error correction (LO5-2) Bettner, Inc., is a calendar-year corporation whose financial statements for 20X0 and 20X1 included errors as follows: Year Ending Inventory Depreciation Expense 20X0 $ 12,000 overstated $ 22,300 overstated 20X1 8,000 understated 6,000 understated Assume that inventory purchases were recorded correctly and that no correcting entries were made at December 31, 20X0, or December 31, 20X1. The errors were discovered in 20X2, after the 20X1 financial statements were issued. Required: Ignoring income taxes, prepare the...
Questions 6-9. DIRECTIONS: Answer Questions 6 through 9 based on the information below. ng December 31...
Questions 6-9. DIRECTIONS: Answer Questions 6 through 9 based on the information below. ng December 31 Assume that you are assigned to prepare an Audit Report Summary on the L Com The L Company uses the accrual method and has an accounting year ending Decembe The bookkeeper of the company has made the following errors: 1. A $1,500 collection from a customer was received on December 29, 2017, but recorded until the date of its deposit in the bank, January...
Brief Exercise 13-13 Larkspur Factory provides a 2-year warranty with one of its products which was...
Brief Exercise 13-13 Larkspur Factory provides a 2-year warranty with one of its products which was first sold in 2017. Larkspur sold 1,044,600 of products subject to the warranty. Larkspur expects $135,320 of warranty costs over the next 2 years. In that year, Larkspur spent $74,380 servicing warranty claims. Prepare Larkspur's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select...
Langley Company's December 31 year-end financial statements contained the following errors: Dec. 31, 2017 Dec. 31,...
Langley Company's December 31 year-end financial statements contained the following errors: Dec. 31, 2017 Dec. 31, 2018 Ending inventory $37,500 understated $55,000 overstated Depreciation expense 10,000 understated An insurance premium of $90,000 was prepaid in 2017 covering the years 2017, 2018, and 2019. The prepayment was recorded with a debit to insurance expense. In addition, on December 31, 2018, fully depreciated machinery was sold for $47,500 cash, but the sale was not recorded until 2019. There were no other errors...
Teal Company is in the process of adjusting and correcting its books at the end of 2017. In reviewing its records, the f...
Teal Company is in the process of adjusting and correcting its
books at the end of 2017. In reviewing its records, the following
information is compiled.
1.
Teal has failed to accrue sales commissions payable at the end
of each of the last 2 years, as follows.
December 31, 2016
$3,300
December 31, 2017
$2,400
2.
In reviewing the December 31, 2017, inventory, Teal discovered
errors in its inventory-taking procedures that have caused
inventories for the last 3 years to...
In 2021, internal auditors discovered that PKE Displays, Inc. had debited an expense account for the...
In 2021, internal auditors discovered that PKE Displays, Inc. had debited an expense account for the $362,000 cost of equipment purchased on January 1, 2018. The equipment’s life was expected to be five years with no residual value. Straight-line depreciation is used by PKE. Required: 1. Determine the cumulative effect of the error on net income over the three-year period from 2018 through 2020, and on retained earnings by the end of 2020. 2. Prepare the correcting entry assuming the...
The reported net incomes for the first 2 years of Larkspur
Products, Inc., were as follows: 2017, $146,000; 2018, $191,100.
Early in 2019, the following errors were discovered.
1.
Depreciation of equipment for
2017 was overstated $16,400.
2.
Depreciation of equipment for
2018 was understated $36,700.
3.
December 31, 2017, inventory
was understated $52,600.
4.
December 31, 2018, inventory
was overstated $14,600.
Prepare the correcting entry necessary when these errors are
discovered. Assume that the books are closed. (Ignore income...
The reported net incomes for the first 2 years of Larkspur
Products, Inc., were as follows: 2017, $134,900; 2018, $177,700.
Early in 2019, the following errors were discovered.
1.
Depreciation of equipment for
2017 was overstated $18,600.
2.
Depreciation of equipment for
2018 was understated $36,200.
3.
December 31, 2017, inventory
was understated $45,100.
4.
December 31, 2018, inventory
was overstated $17,600.
Prepare the correcting entry necessary when these errors are
discovered. Assume that the books are closed. (Ignore income...
The reported net incomes for the first 2 years of Coronado
Products, Inc., were as follows: 2020, $147,800; 2021, $202,000.
Early in 2022, the following errors were discovered.
1.
Depreciation of equipment for
2020 was overstated $15,900.
2.
Depreciation of equipment for
2021 was understated $38,300.
3.
December 31, 2020, inventory
was understated $49,500.
4.
December 31, 2021, inventory
was overstated $14,900.
Prepare the correcting entry necessary when these errors are
discovered. Assume that the books are closed. (Ignore income...
Questions 6-9. DIRECTIONS: Answer Questions 6 through 9 based on the information below. ng December 31 Assume that you are assigned to prepare an Audit Report Summary on the L Com The L Company uses the accrual method and has an accounting year ending Decembe The bookkeeper of the company has made the following errors: 1. A $1,500 collection from a customer was received on December 29, 2017, but recorded until the date of its deposit in the bank, January...
Brief Exercise 13-13 Larkspur Factory provides a 2-year warranty with one of its products which was first sold in 2017. Larkspur sold 1,044,600 of products subject to the warranty. Larkspur expects $135,320 of warranty costs over the next 2 years. In that year, Larkspur spent $74,380 servicing warranty claims. Prepare Larkspur's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select...
Teal Company is in the process of adjusting and correcting its
books at the end of 2017. In reviewing its records, the following
information is compiled.
1.
Teal has failed to accrue sales commissions payable at the end
of each of the last 2 years, as follows.
December 31, 2016
$3,300
December 31, 2017
$2,400
2.
In reviewing the December 31, 2017, inventory, Teal discovered
errors in its inventory-taking procedures that have caused
inventories for the last 3 years to...
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