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46 views4 pagesChapter 6 Exercises
Uploaded by
Casper John Nanas MuñozCopyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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/ 4
£67
Prepare the necessary correcting journal entries when the following errors are
discovered in 2012. Assume that the nominal accounts of 2012 are not yet closed
when the errors are discovered
a
b
©
Sale of merchandise of P12,000 was made on December 28, 2011 but
was taken up in the books on January 4, 2012,
No adjustment for the unexpired insurance of P2,400 was made as of
December 31, 2011
‘Merchandise bought on account and received in December 2011, costing
7,500, was omitled from the inventory count made as of December 31,
2011
‘Adjustment for the accrued interest expense of P150 was omitted at the
fend of 2011.
Depreciation of the office equipment during 2011 was overstated by
3,000.
‘The following errors are discovered in the records of Elizabeth Company in 2013.
Sales of merchandise made in 2013 of PS,000 were taken up in the books
in 2012
‘Supplies bought on account on October 19, 2013, amounting to P1,200,
were taken up in the records as P2100
Accrued rent expense a6 of the end of 2012 of P2.400 was not adjusted
A debit entry to delivery equipment of P15,000 was erroneously posted to
delivery expenses on August 18, 2013.
Adjustment for bad debis losses atthe end of 2013 was understated by
1,000.
Using the information given above, determine:
a
b
The effect of each error on the net income of 2013,
The correcting entries that should be prepared as of December 31, 2013
‘assuming that the accounts are not yet closed.
Give the necessary correcting entries when each of the following errors are
discovered in 2012. Assume that the nominal accounts of 2012 are stil open when
the errors are discovered.
Advertising expense was debited for P4,800 representing the
‘consideration for a one-year contract from September 1, 2011. No
adjustment was made on December 31, 2011
'No adjustment was made on December 31, 2011 for the unearned
income of P300.
Purchases of 20,000, made in 2011, were taken up in 2012. 4. No adjustment was made on December 31, 2011 for the accrued taxes of
7,600.
e, Depreciation of the delivery equipment during 2011 was understated by
5,000.
£6.10 The income statement of Quezon Gompany for the year 2012 shows an income
before income tax of P105,000. The following errors committed in 2012 are
discovered.
‘a. Unpaid wages of workers for December 27 to 31 of P1,650 were not
taken up.
‘Accrued sales taxes as of December 31 were understated by P4,300.
Merchandise inventory as of the end of the period was overstated by
P5500.
(Unused portion of supplies expense account balance as of December 31
‘of P00 was not recognized.
In computing for annual depreciation of the delivery equipment costing
50,000, fe of 10 years was erroneously used when the estimated
useful life should be 5 years.
1. Cash sales of P80,000 were not recorded although actual delivery had
been made.
9. Purchase returns of P1,200 were not taken up in the records. Term: on
account
2 eg
Determine the following
2, What will be the effect of each error on the 2012 income before income
tax?
'b. What should be the income before income tax after correcting the above
errors? 6.17 On January 1, 2014, Aker Corporation acquited @ machine at the cost of
£200,000. It was to be depreciated on the straight-line method over a five-year
Period with no residual value, Because of a bookkeeping error, no depreciation
was recorded in 2014. The oversight was discavered during the preparation of
the 2015 financial statements,
Indicate the effect ofthe error on the following items:
Depreciation of 2014 and 2015
Net income of 2014 and 2015
© Retained eamings balance as of December 31, 2014 and 2015
9. Balance of accumulated depreciation as of December 31, 2014 and 2015
(ACPA Bxamision, apie
E6.18 Upon inspection ofthe records of Everybody/s Company, the following facts were: