You discovered the following errors in connection with your examination of the 2) Accrued interest receivable of P15,000 was not recorded at the end of 2020, 3) The company paid one-year insurance premium of P24,000 effective April 1, 2020. The entire amount was debited to expense account and no adjustment PROBLEM 6-2 Counterbalah financial statements of Jane Corporation: Lof 2020.
Q: CPA Co.'s allowance for doubtful accounts was P1,000,000 at the end of 2021 and P900,000 at the end…
A: The allowance for doubtful account is maintained to record the bad debt expense for the firm. The…
Q: The Eldorado Corporation’s controller prepares adjusting entries only at the end of the reporting…
A: Interest: The amount charged on borrowed principal amount called Interest.
Q: As an accountant of Mickey Mouse Corporation you were assigned to prepare an aging of its accounts…
A: Accounts written-off during 2021 = Estimated uncollectible accounts - (Beginning allowance for…
Q: 1. What is the total effect of the errors on the 2020 net income? a. Overstated by P80,400b.…
A: Retained earnings Retained earnings are the total amount of a company's profits that are set aside…
Q: Santana Rey, owner of Business Solutions, realizes that she needs to begin accounting for bad debts…
A: Bad debt expense is amount that the business expects to be uncollectible from the customer from whom…
Q: The F Company uses the allowance method is used to account for uncollectible receivables. It had the…
A: Receivables, loans, and other obligations that are likely to be paid are referred to as…
Q: Nissan Inc. prepared an aging of its accounts receivable at December 31,2020 and determined that the…
A:
Q: Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for…
A: Entry:- Accounts Receivable Sales (being sales made) Cash Accounts Receivable…
Q: A Beautiful Face Cosmetics Company sell its products to customer on a credit basis. An adjusting…
A: In order to increase sales, the business organization sells its goods on a credit basis. Out of the…
Q: On December 31, 2020, Sunland Co. estimated that 4% of its net accounts receivable of $488,600 will…
A: The allowance for doubtful accounts is established to record the estimated bad debt expenses for the…
Q: Black Company reported accounts payable on December 31, 2020 P4,500,000 before any necessary…
A: SOLUTIONS- ACCOUNTS PAYABLE= IT IS AN ACCOUNT THAT REPRESENTS A COMPANYS OBLIGATIONS TO PAY OFF A…
Q: The Eldorado Corporation’s controller prepares adjusting entries only at the end of the reporting…
A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…
Q: 10. DODY Company uses the statement of financial position approach in estimating uncollectible…
A: A Balance sheet depicts the financial standing of any entity at a specified date. Thus, it is also…
Q: On December 31, 2021, Chel Company had an unadjusted credit balance of P10,000 in its allowance for…
A: Allowance for uncollectible accounts is considered as a contra asset account. It is prepared against…
Q: The Elmaida Corporation’s controller prepares adjusting entries only at the end of the reporting…
A: Hey, since there are multiple requirements posted, we will answer the first three requirements. If…
Q: Gowns, Inc. uses 'the percentage of receivables' basis to estimate its impairment loss. At December…
A: Impairment on accounts receivable refers to loss of value in receivables that is pending to be…
Q: Marin Ltd. started the year with a balance owing from Stratford Inc. of $31,200. After several phone…
A: Journal entry refer to the first step in process of accounting which refer to recording of financial…
Q: Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: Santana Rey, owner of Business Solutions, realizes that she needs to begin accounting for bad debts…
A: Adjusting journal entry: At year end when company finalise its accounts then any unrecognized income…
Q: Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for…
A: Accounts receivable is the term which is defined as the payment or the proceeds that the company or…
Q: The following information was taken from the books of Buttercup Dealers at 28 February 2020 before…
A: Allowance for credit losses is an estimate of such trade debtors which are likely to be…
Q: Analysis of accounts receivable reveals that with two exceptions, all appeared collectible as at…
A: Adjusting and Non Adjusting Event Adjusting events are occasions where proof of conditions will be…
Q: FDN Company reported the following on December 31, 2021, before adjustments: Accounts Receivable…
A: Estimated uncollectible accounts = accounts receivable x uncollectible % Doubtful accounts expense…
Q: Miranda Company borrowed $100,000 cash on September 1, 2019, and signed a one-year 6%,…
A: Step 1 As per accounting concept, all of the outstanding liability is to be shown at each reporting…
Q: The following are a series of unrelated situations. 1. Halen Company’s unadjusted trial balance…
A: As posted multiple questions we are answering only one question as per our guidelines policy kindly…
Q: Correction of errors In examining the books of Mulan Company, you found out that certain adjustments…
A: SOLUTION- NET INCOME IS GROSS PROFIT MINUS ALL OTHER EXPENSES AND COSTS AS WELL AS ANY OTHER…
Q: DN Company reported the following on December 31, 2021, before adjustments: ACcounts Receivable…
A: Solution Given On December 31 2021 before adjustment Accounts receivables 19000000…
Q: On December 31, 2021, when its Allowance for Doubtful Accounts had a debit balance of $1,500,…
A: Allowance for Doubtful Accounts: Allowance for doubtful accounts is determined as the reduction in…
Q: Accrued rent income of P 25,000 was overlooked at the end of 2021. What would be the adjusting entry…
A: Solution Concept Accrued income means the income that is earned but not received yet The accrued…
Q: Use the following information for the next four questions: From inception of operations, Alas…
A: Allowance for Doubtful accounts It shows the estimated value of accounts receivable which an…
Q: Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for…
A: 1. Determination of Journal entries for the 2021 write-offs and collection of previous written offs…
Q: Milan Company reported pretax income of P 6,500,000 on December 31, 2021. During your audit, the…
A: Solution Pretax income is a company's income after all operating expenses have bee deducted from…
Q: At December 31, 2018, the Leni Inc. account balances before the year-end adjusting entries are the…
A: The net realizable value of receivable is calculated as difference of gross receivable and the…
Q: Occanside Company uses the balance sheet approach in estimating uncollectible accounts expense. It…
A: Balance for allowance for impairment at December 31, 2019. = (Amount not yet due x 1%) + (1-30 days…
Q: Diego Corp paid its annual corporate insurance on July 1, 2020 for the upcoming 12 month period of…
A: Adjusting entries are prepared by the management at the end of the accounting period, in order to…
Q: adjustment required to record the change? a. Debit - Retained Earnings, P 30,000; Credit -…
A: Amoeba Company changed its method of accounting for bad debts from the direct write-off method to…
Q: SM Company prepared an aging of its accounts receivable at December 31, 2021 and determined that the…
A: Accounts Written off during the year = Balance of accounts receivable on December 31, 2020 +…
Q: During the course of your examination of the financial statements of the Hales Corporation for the…
A: Net Income: The net income refers to that part of income on which the profit of the company is…
Q: The following information was taken from the accounts receivable records of Sarasota Corporation as…
A: Calculation of Estimated Uncollectibles Particular Outstanding Balance Percentage Estimated to be…
Q: Lindy Company's auditor discovered several errors. No errors were corrected during 2020. The errors…
A: Prepaid insurance means the insurance amount is paid in advance. Adjustment of prepaid insurance…
Q: At 30 September 2020, Wall had an allowance for doubtful account of P37,000. During the year ended…
A: The numerical has covered the concept of Accounts Receivable. An allowance for doubtful debt…
Q: Sandhill, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2020.…
A: Given that, the company has changed from LIFO to FIFO valuation, due to a change from LIFO to FIFO…
Q: Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for…
A: There are 2 methods used in accounting for uncollectible accounts:- Direct write-off method…
Q: The Eldorado Corporation's controller prepares adjusting entries only at the end of the reporting…
A: Monthly rent=Total rent12=$42,00012=$3,500
Q: On December 31, 2020, Novak Corp. estimated that 4% of its net accounts receivable of $414,400 will…
A: given that, accounts recievables as on 31 dec 2020 = $414400 estimated bad debts = 4% of accounts…
Q: You were engaged by DIANE Company to audit its financial statements for the first time. In examining…
A: The question is based on the concept of Auditing.
Q: n January 31, 2020, Allison company wrote off and uncollectible accounts of $8500. The company uses…
A: Allowance Method: in allowance method allowance for estimated uncollectible is created. The…
Q: The following errors were discovered in the course of examination of the Kamuning Company's…
A: Note: There will be no effect of the error made on booking of insurance expense because the amount…
Q: You were engaged by CPA Co. to audit its financial statements for the first time. In ex: you found…
A: Retained Earnings- Retained earnings are the accumulated portion of a company's profits in a fiscal…
Based on the given data, answer the three questions. Show your solutions.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- 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.You discovered the following errors in connection with your examination of the Chapter 6 - Correction of Errors PROBLEM 6-2 Counterbalancing Errors You discovered the following errors in connection with your examination of the financial statements of Jane Corporation: Accrued rent expense of P10,000 was not recorded at the end of 2020. 2) Accrued interest receivable of P15.000 was not recorded at the end of 2020. 3) 1) S) The company paid one-year insurance premium of P24,000 effective April 1 2020. The entire amount was debited to expense account and no adjustment was made at the end of 2020. 4) The company leased a portion of its building for P48,000. The term of the lease is one year ending April 30, 2021. Collection of rent was credited to rent revenue account. At the end of 2020, no entry was made to take up the unearned portion of the amount collected. The following data were extracted from the financial statements of Jane Corporation: 2020 2021 100,000 300,000 100,000 Net income…Correction of errorsIn examining the books of Mulan Company, you found out that certain adjustments had been overlooked at the end of 2019 and 2020. You also discovered that other items had been improperly recorded. These omissions and other failures for each year are summarized below: 12/31/20 12/31/19Salaries payable P780,000 P873,600Interest receivable 213,000 259,200Prepaid insurance 307,800 384,000Advances from customers (Collections from customers had beenrecorded as sales but should have been recognized as advances from customers because goods were not shipped until the following year) 561,000 470,400 Machinery (Capital expenditures had been recorded as repairs but shouldhave been charged to Machinery; the depreciation rate is 10% per year, but depreciation in the year of expenditure is to be recognized at 5%) 522,000 564,000 Required:Compute for the total effect of errors in the net income of 2019 and 2020.
- The following information is available for Reagan Company: Allowance for doubtful accounts at December 31, 2020 (beginning balance) $ 8,000 Accounts receivable deemed worthless and written off during 2021 9,000 As a result of a review and aging of accounts receivable it has been determined that an allowance for doubtful accounts of $5,500 is needed at December 31, 2021. What amount should Reagan record as "bad debt expense" for the year ended December 31, 2021? $4.500 $5.500 $6.500 13.500Correction of errors In examining the books of Ula Company, you found out that certain adjustments had been overlooked at the end of 2019 and 2020. You also discovered that other items had been improperly recorded. These omissions and other failures for each year are summarized below: 12/31/20 Salaries payable Interest receivable Prepaid insurance Advances from customers (Collections from customers had been recorded as sales but should have been recognized as advances from customers because goods were not shipped until the following year) 12/31/19 P780,000 P873,600 259,200 384,000 470,400 213,000 307,800 561,000 Machinery (Capital expenditures had been recorded as repairs but should have been charged to Machinery; the depreciation rate is 10% per year, but depreciation in the year of expenditure is to be recognized at 5%) 522,000 564,000 Required: Compute for the total effect of errors in the net income of 2019 and 2020.Questions: a. What is the correct bad debt expense for the year assuming that the allowance for doubtful accounts had a balance of P120,500 as of January 1, 2022? b. Your proposed adjusting journal entry to correct the balance of allowance for bad debts would include a net debit or credit of? (just indicate the amount)
- 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.Hardys Landscape Services total revenue on account for 2018 amounted to 273,205. The company, which uses the allowance method, estimates bad debts at percent of total revenue on account. Required Journalize the following selected entries: 2012 Dec. 12Record services performed on account for E. E. Morton, 245. 31Record the adjusting entry for Bad Debts Expense. 31Record the closing entry for Bad Debts Expense. 2013 Feb. 18Write off the account of E. E. Morton as uncollectible, 245. Check Figure Adjusting entry amount, 1,366.03Current Attempt in Progress On December 31, 2021, the Allowance for Doubtful Accounts has an unadjusted debit balance of $1,020. Lawn Corporation estimates that 10% of its total accounts receivable balance of $94,700 will become uncollectible and records the necessary adjustment to the Allowance for Doubtful Accounts. On May 11, 2022, Lawn Corporation determined a J. Reno's account was uncollectible and wrote off $1,570. On June 12, 2022, Reno paid the amount previously written off. Prepare the journal entries on December 31, 2021, May 11, 2022, and June 12, 2022. (List all debit entries before credit entries. 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 O for the amounts.) Date Account Titles and Explanation Debit Credit (To reverse write-off of account receivable) (To record recovery of uncollectible amount)
- DI-TWO Corporation had the following accounts and their balances on December 31 before any adjustments: Sales P5,000,000 Accounts Receivable 600,000 Allowance for doubtful accounts 25,000Isbell Company’s December 31, 2024 unadjusted trial balance reports a $1,000 credit balance in Allowance for Doubtful Accounts. As a result of a review and aging of accounts receivable at that time, it has been determined that an allowance for doubtful accounts of $5,500 is needed at December 31, 2024. What amount should Isbell record as Bad Debt Expense for the year ended December 31, 2024? Select one: $13,500 $5,500 $4,500 $6,500b. Prepare the year-end adjusting entry to record the bad debts using the aged uncollectible accounts receivable in (a). Assume the current balance in Allowance for Doubtful Accounts is a Y8,000 debit