Bonita, Inc. is a calendar-year corporation. Its financial statements for the years 2021 and 2020 contained errors as follows: Ending inventory Depreciation expense 2021 O $6000 overstated O $15750 understated 0 $0 O $6000 understated $10200 overstated $5550 understated 2020 $23500 overstated $17500 overstated Assume that no correcting entries were made at December 31, 2020, or December 31, 2021 and that no additional errors occurred in 2022. Ignoring income taxes, by how much will working capital at December 31, 2022 be overstated or understated?
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- Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended December 31, 2019 and 2020, contained the following errors: In addition, on December 31, 2020, fully depreciated machinery was sold for 10,800 cash, but the sale was not recorded until 2021. There were no other errors during 2019 or 2020, and no corrections have been made for any of the errors. Refer to the information for Shannon Corporation above. Ignoring income taxes, what is the total effect of the errors on the amount of working capital (current assets minus current liabilities) at December 31, 2020? a. working capital overstated by 4,200 b. working capital understated by 5,800 c. working capital understated by 6,000 d. working capital understated by 9,800Sheffield, Inc. is a calendar-year corporation. Its financial statements for the years 2026 and 2025 contained errors as follows: Ending inventory Depreciation expense 2026 $15850 overstated $ 6500 overstated $3450 overstated $3450 understated. $9650 overstated $6200 understated 2025 $25000 overstated $18500 overstated Assume that the proper correcting entries were made at December 31, 2025. By how much will 2026 income before taxes be overstated or understated? Sheffield, Inc. is a calendar-year corporation. Its financial statements for the years 2026 and 2025 contained errors as follows: Ending inventory Depreciation expense 2026 $15850 overstated $6500 overstated $3450 overstated $3450 understated $9650 overstated $6200 understated 2025 $25000 overstated $18500 overstated Assume that the proper correcting entries were made at December 31, 2025, By how much will 2026 income before taxes be overstated or understated?Blossom Inc. is a calendar-year corporation. Its financial statements for the years 2022 and 2021 contained errors as follows: 2022 2021 Ending Inventory $9100 overstated $18100 overstated Depreciation Expense $6100 understated $13600 overstated O $7600 overstated O $15200 overstated O $10600 overstated O $3000 understated Assume that the proper correcting entries were made at December 31, 2021. By how much will 2022 income before taxes be overstated or understated?
- XYZ Corp. is a calendar-year corporation whose financial statements for 2019 and 2020 included errors as follows: Ending Inventory. Year Depreciation Expense 2019 30,000 overstated $36,000 overstated O a. $4,000 decrease O b. $32,000 increase 12,000 understated Time left 2:51:11 $ 2020 10,000 understated Assume that purchases were recorded correctly and that no correcting entries were made at December 31, 2019 or December 31, 2020. Ignoring income taxes, by how much should XYZ's retained earnings be retrospectively adjusted at January 1, 2021?Bonghill Company’s December 31 year-end financial statements had the following error: December 31, 2019 December 31, 2020 Ending Inventory 13,500 understated 19,800 overstated Depreciation expense 3,600 understated - Unearned rental 5,000 understated - Prepaid insurance - 8,000 understated There were no other errors during the years 2019 or 2020 and no corrections have been made for any of the errors. (Ignore income tax considerations) What is the net effect of the errors in Bonghill’s December 31, 2020 accumulated profits balance?Harvey Inc. is a calendar corporation. Its financial statements for the years 2021 and 2022 contained errors as follows: Year 2022 Year 2021 Inventory at year end 10,000 understated 30,000 overstated Depreciation expense 8,000 understated 25,000 overstated QUESTION: Assume that the proper correcting entries were made at December 31, 2021. By how much will 2022 income before income taxes be overstated or understated? ["", "", "", ""] Assume that no correcting entries were made at December 31, 2021. Ignoring income taxes, by how much will retained earnings at December 31, 2022 be overstated or understated? ["", "", "", ""] Assume that no correcting entries were made at December 31, 2021 or December 31, 2022, and that no additional errors occurred in 2023. Ignoring income taxes, by how much will working capital at December 31, 2023 be overstated or understated?
- During 2021, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts:2019 understated by $120,0002020 overstated by 150,000WMC uses the periodic inventory system and the FIFO cost method.Required:1. Determine the effect of these errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.)2. Prepare a journal entry to correct the error in 2021.3. Will WMC account for the error (a) retrospectively or (b) prospectively?During 2021, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts: 2019 understated by $ 142,000 2020 overstated by 194,000 WMC uses the periodic inventory system and the FIFO cost method. Required:1-a. Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.)1-b. Determine the effect of 2020 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.)2. Prepare a journal entry to correct the error in 2021.3. Will WMC account for the error (a) retrospectively or (b) prospectively? a. & b. are attached images c. & d. are below (they are short please please answer) c. Record correction of error journal entry form. d. Will WMC account for the error (a) retrospectively or (b) prospectively?During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts: understated by overstated by $128,000 158,000 2019 2020 WMC uses a periodic inventory system and the FIFO cost method. Required: 1. Determine the effect of these errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.) 2. Prepare a journal entry to correct the errors. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the effect of these errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.) Retained earnings would be Required 1 Required 2
- Dr. Drake Ramoray is a calendar-year corporation whose financial statements for 2020 and 2021 included errors as follows: Year Ending Inventory Sales Revenue 2020 $40,000 understated $25,000 understated 2021 24,000 understated 37,000 understated Assume that purchases were recorded correctly and that have been no correcting entries made to either 2020, or 2021. It is now January 1, 2022, and suppose the books are closed for 2020, but not 2021. Ignoring income taxes, by how much should Drake directly adjust retained earnings in their correcting journal entry? O $15,000 decrease O $38,000 decrease $15,000 increase O $65,000 increase O $86,000 increase O $126,000 decrease O None of the given answers O $38,000 increase O $126,000 increase O $9,000 increaseDuring 2021, WMC Corporation discovered that its ending Inventories reported on Its financial statements were misstated by the following amounts: 2019 understated by 2020 overstated by WMC uses the periodic Inventory system and the FIFO cost method. Required: 1-a. Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore Income taxes.) 1-b. Determine the effect of 2020 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore Income taxes.) 2. Prepare a journal entry to correct the error in 2021. 3. Will WMC account for the error (a) retrospectively or (b) prospectively? Complete this question by entering your answers in the tabs below. Req 1A Req 18 Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.) (If the answers is no effect then select "No effect" in the dropdown.) 2019 Beginning inventory Plus: net purchases $146,000 202,000 Less:…After the issuance of the 2021 financial statements, Pine Company discovered a computational error of P150,000 in the calculation of the December 31, 2021 inventory. The error resulted in a P150,000 overstatement in the cost of goods sold for the year ended December 31, 2021. In October 2022, the entity paid the amount of P500,000 in settlement of litigation instituted against it during 2021. No provision for this possible loss was made in 2021. The income tax rate is 30%. What adjustment is required to restate retained earnings on January 1, 2021?