The Meow Company was organized on January 1, 2020, and since its inception has not recognized accruals and deferrals. Selected accounts revealed the following information: Accruals and Deferrals Not Recognized at Year-end Prepaid expenses 2020 2021 2022 30,000 28,000 29,000 34,000 Unearned revenue 20,000 15,000 Accrued expenses 27,500 25,000 27,000 Accrued revenue 42,500 45,000 41,000 Year 2020 2021 2022 Profit (Loss) 240,000 (120,000) 200,000 Based on the above and the result of your audit, compute the corrected profit for the following year: 2020 A. 319,000 profit В. 264,000 рroft C. 216,000 profit D. 246,000 profit 2021 А. 98,000 loss B. 122,000 loss C. 118,000 loss D. 127,000 loss 2022 A. 233,000 profit В. 211,000 рrofit C. 222,000 profit D. 244.000 profit

The Meow Company was organized on January 1, 2020, and since its inception has not recognized accruals and deferrals. Selected accounts revealed the following information: Accruals and Deferrals Not Recognized at Year-end Prepaid expenses 2020 2021 2022 30,000 28,000 29,000 34,000 Unearned revenue 20,000 15,000 Accrued expenses 27,500 25,000 27,000 Accrued revenue 42,500 45,000 41,000 Year 2020 2021 2022 Profit (Loss) 240,000 (120,000) 200,000 Based on the above and the result of your audit, compute the corrected profit for the following year: 2020 A. 319,000 profit В. 264,000 рroft C. 216,000 profit D. 246,000 profit 2021 А. 98,000 loss B. 122,000 loss C. 118,000 loss D. 127,000 loss 2022 A. 233,000 profit В. 211,000 рrofit C. 222,000 profit D. 244.000 profit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 16E: Dudley Company failed to recognize the following accruals. It also recorded the prepaid expenses and...

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Dudley Company failed to recognize the following accruals. It also recorded the prepaid expenses and unearned revenues as expenses and revenues, respectively', in the following year when paid or collected. The reported pretax income was 20,000 in 2018, 25,000 in 2019, and 23,000 in 2020. Required: 1. Compute the correct pretax income for 2018, 2019, and 2020. 2. Prepare the journal entries necessary in 2020 if the errors are discovered at the end of that year. Ignore income taxes. 3. Prepare the journal entries necessary in 2021 if the errors are discovered at the end of that year. Ignore income taxes.
Temporary and Permanent Differences Lin has just completed its first year of operations and has a number of differences between its pretax financial income and taxable income. The differences at the end of 2019 are as follows: a. Lin recorded 7,000 of interest revenue on municipal bonds during 2019. b. 15,000 of accrual-basis sales were recognized in income during 2019. They are expected to be received in cash during January 2020. c. Depreciation on machinery totaled 28,000 using straight-line depreciation for financial statements. Lins tax accountant recorded 36,000 of depreciation on the companys tax return. d. Lin was fined 3,000 for violating certain labor laws during 2019. Lin paid the fine during 2019 and agreed to ensure future violations would not occur. e. Bryant Corporation has agreed to rent space from Lin in 2020. In December 2019, Lin received 7,500 from Bryant in advance for rent. f. For 2019, Lin reported 9,500 of warranty expense on its income statement. The companys warranty liability at the end of 2019 was 6,250. Lin expects additional warranty costs to be paid during 2020. Required: 1. For each item, determine if it results in a temporary or permanent difference. If the item results in a temporary difference, determine if it results in a deferred tax asset or deferred tax liability. 2. For each item, determine if it initially results in pretax financial income being greater than or less than taxable income. 3. Next Level Discuss why permanent differences do not impact future periods taxable income and how these differences affect tax rates.
Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense at December 31, 2020, if the double-declining-balance method were used? a. $187,200 b. $192,000 c. $195,200 d. $312, 000
Abrat Company failed to accrue an allowance for doubtful accounts of 13,500 in 2019. Upon discovery of this error in 2020 prior to making its estimate of doubtful accounts, what correcting journal entry should Abrat make? Ignore income taxes.
At the end of 2019, Framber Company received 8,000 as a prepayment for renting a building to a tenant during 2020. The company erroneously recorded the transaction by debiting Cash and crediting Rent Revenue in 2019 instead of 2020. Upon discovery of this error in 2020, what correcting journal entry will Framber make? Ignore income taxes.
What is the corrected 2019 Net Income? * Bee Company's net income for 2018, 2019, and 2020 were P100,000; P145,000; and P185,000 respectively. The following items were not properly handled: a. Rent of P6,500 for 2021 was received from a lessee on December 31, 2020, and was recorded as outright income in 2020. b. Salaries payable at the end of the following years were omitted: December 31, 2017 2,500 December 31, 2018 5,500 December 31, 2019 7,500 December 31, 2020 4,700 c+ The following unused office supplies were omitted in the accounting records: December 31, 2017 3,500 6,500 December 31, 2018 December 31, 2019 December 31, 2020 3,700 7,100 O 123,700 O 140,200 146,700 159,300 O none of the them
ces Actuary and trustee reports indicate the following changes in the PBO and plan assets of Mahomes Industries during 2024: Prior service cost at January 1, 2024, from plan amendment at the beginning of 2021 (amortization: $23 million per year) Net loss-AOCI at January 1, 2024 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) PBO Beginning of 2024 Service cost Interest cost, 7% Loss (gain) on PBO Less: Retiree benefits End of 2024 Req 1A Req 18 and 2 to 4 $2,500 99 175 (33) (76) $ 2,665 Pension expense Plan Assets Complete this question by entering your answers in the tabs below. Pension Expense Beginning of 2024 Return on plan assets, 8% (10% expected) Cash contributions Less: Retiree benefits End of 2024 Required: 1-8. Determine Mahomes's pension expense for 2024. 1-b, 2. to 4. Prepare the appropriate Journal entries to record the pension expense, to record any 2024 gains and losses, to…
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Mahomes Industries during 2024: Prior service cost at January 1, 2024, from plan amendment at the beginning of 2021 (amortization: $18 million per year) Net loss-AOCI at January 1, 2024 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) РВО Beginning of 2024 Service cost Interest cost, 7% Loss (gain) on PBO Less: Retiree benefits End of 2024 $ 2,000 94 140 (28) (66) $ 2,140 Plan Assets Beginning of 2024 Return on plan assets, 8% (10% expected) Cash contributions Less: Retiree benefits End of 2024 $ 126 million $780 million 10 years 7% $1,800 144 104 (66) $ 1,982 Required: 1-a. Determine Mahomes's pension expense for 2024. 1-b, 2. to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2024 gains and losses, to record the cash contribution to plan assets and to record retiree…
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Mahomes Industries during 2024: Prior service cost at January 1, 2024, from plan amendment at the beginning of 2021 (amortization: $20 million per year) Net loss-AOCI at January 1, 2024 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) РВО Beginning of 2024 Service cost Interest cost, 7% Loss (gain) on PBO Less: Retiree benefits End of 2024 Required: Plan Assets Beginning of 2024 $ 2,200 96 Return on plan assets, 8% (10% expected) 154 (38) Cash contributions (78) Less: Retiree benefits $ 2,350 End of 2024 1-a. Determine Mahomes's pension expense for 2024. $ 140 million $ 880 million 10 years 7% $ 2,000 160 106 (78) $ 2,196 1-b, 2. to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2024 gains and losses, to record the cash contribution to plan assets and to record…
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Mahomes Industries during 2024: Prior service cost at January 1, 2024, from plan amendment at the beginning of 2021 (amortization: $12 million per year) Net loss-AOCI at January 1, 2024 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) PBO Beginning of 2024 Service cost Interest cost, 7% Loss (gain) on PBO Less: Retiree benefits End of 2024 Plan Assets Beginning of 2024 $ 1,400 88 Return on plan assets, 8% (10% expected) 98 (22) Cash contributions (54) Less: Retiree benefits $ 1,510 End of 2024 $ 84 million $ 480 million 10 years 7% $ 1,200 96 98 (54) $ 1,340 Required: 1-a. Determine Mahomes's pension expense for 2024. 1-b, 2. to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2024 gains and losses, to record the cash contribution to plan assets and to record retiree…
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts Industries during 2021: Prior service cost at Jan. 1, 2021, from plan amendment at the beginning of 2018 (amortization: $5 million per year) Net loss-AOCI at Jan.1, 2021 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) Beginning of 2821 Service cost Interest cost, 7% Loss (gain) on PBO Less: Retiree benefits End of 2021 PBO Req 1A $ 800 58 Req 18 and 2 to 4 56 (13) (34) Pension expense $ 867 Plan Assets Beginning of 2021. Return on plan assets, 8% (10% expected) Complete this question by entering your answers in the tabs below. Cash contributions Less: Retiree benefits End of 2021 $ 600 Required: 1-a. Determine Douglas-Roberts's pension expense for 2021. 1-b, 2. to 4. Prepare the appropriate Journal entries to record the pension expense, to record any 2021 gains and losses, to record the…
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Mahomes Industries during 2024: Prior service cost at January 1, 2024, from plan amendment at the beginning of 2021 (amortization: $5 million per year) Net loss-AOCI at January 1, 2024 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate ($ in millions) PBO Beginning of 2024 Service cost Interest cost, 7% Loss (gain) on PBO Less: Retiree benefits End of 2024 Req 1A Req 1B and 2 to 4 Complete this question by entering your answers in the tabs below. Pension Expense Service cost Interest cost Expected return on the plan assets Amortization of prior service cost Amortization of net loss Pension expense $ 700 81 49 (15) (40) $ 775 $ Required: 1-a. Determine Mahomes's pension expense for 2024. 1-b, 2. to 4. Prepare the appropriate journal entries to record the pension expense, to record any 2024 gains and losses, to record the cash…