Cash 32000 accumulated depreciation 200000 machinery

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10,000 5. Cash 32,000 Accumulated depreciation 200,000 Machinery 200,000 Gain on sale of machinery 32,000
Problem 16-3 Atlanta company reported net income for 2018 P4,000,000 and 2019 P5,000,000. An audit revealed certain errors. A collection of P100,000 from a customer was received on December 29, 2019 but not recorded until January 4, 2020. Supplier’s invoice on account of P160,000 for inventory received in December 2019 was not recorded until January 2020. Inventories on December 31, 2018 and 2019 were correctly stated. Depreciation for 2018 was understated by P90,000. In September 2019, a P20,000 invoice for office supplies was charged to purchases. Office supplies are expensed when incurred, Sales on account of P300,00 in December 2019 were recorded in 2020. Required: a. Determine the correct net income for 2018 and 2019 b. Prepare adjusting entries on December 31, 2019.
3. Retained earnings 90,000 Accumulated depreciation 90,000 4. Office supplies 20,000 Purchases 20,000 5. Accounts receivable 300,000 Sales 300,000 Problem 16-4 Upon inspection of the records of Emerald Company, the following facts were discovered for the year ended December 31, 2019. A fire insurance premium of P40,000 was paid an charged as insurance expense for 2019. The fire insurance policy covers one year from April 1, 2019. Inventory on January 1, 2019 was understated by P80,000. Inventory on December 31, 2019 was understated by P120,000. Taxes of P60,000 for the fourth quarter of 2019 were paid on January 20, 2020 and charged as expense of 2020. On December 5, 2019 a cash advance of P100,000 by a customer was received for goods to be delivered in January, 2020. The amount of P100,000 was credited to sales. The gross profit on sales is 40%. The net income for the year ended December 31, 2019 before any adjustments is P1,550,000. Required: a. Determine the correct net income for 2019 b. Prepare adjusting entries on December 31, 2019.
Problem 16-5 Tower Company failed to recognized accruals and prepayments during the first year of operations. The income before tax is P5,000,000. The accruals and prepayments not recognized at the end of the year are: Prepaid insurance 200,000 Accrued wages 250,000 Rent revenue collected in advance 300,000 Interest receivable 100,000 What is the corrected income before tax?

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