AJE (1) Share donation 60,000 Treasury shares 35,000 Land 10,000 Building 15,000

Size: px
Start display at page:

Download "AJE (1) Share donation 60,000 Treasury shares 35,000 Land 10,000 Building 15,000"

Transcription

1 CHAPTER 19 COMPREHENSIVE AUDIT OF BALANCE SHEET AND INCOME STATEMENT ACCOUNTS Daffodil, Inc. Adjusting Journal Entries AJE (1) Share donation 60,000 Treasury shares 35,000 Land 10,000 Building 15,000 (2) Accumulated depreciation - machinery 1,000 Loss on sale of machinery 2,000 Machinery 3,000 Cost P 5,000 Less: AD (20%) 1,000 NBV P 4,000 Proceeds 2,000 Loss P 2,000 (3) (a) Accumulated depreciation - building 300 Retained earnings 300 (b) Factory operating expenses 21,300 Accumulated depreciation - building 6,300 Accumulated depreciation - machinery 15,000 Building (P315,000 x 2%) Machinery: 5,000 x 10% = P ,000 x 10% = 14,500 P15,000 (4) Merchandise inventory, B/S 175,000 Merchandise inventory, I/S 175,000

2 19-2 Solutions Manual to Accompany Applied Auditing, 2006 Edition (5) Administrative expenses 1,000 Allowance for doubtful accounts 1,000 (6) Factory operating expenses 3,000 Unexpired insurance 3,000 (7) Retained earnings 2,500 Bond interest expense 2,500 Unamortized bond discount 5,000 (8) Sinking fund assets 23,500 First Mortgage SF Bonds 23,500 (9) Sinking fund assets 1,500 Sinking fund income 1,500

3 19-1. Daffodil, Inc. (continued) Comprehensive Audit of Balance Sheet and Income Statement Accounts 19-3 Daffodil, Inc. Working Trial Balance Trial Balance Adjustments Income Statement Balance Sheet Dr Cr Dr Cr Dr Cr Dr Cr Cash P 64,000 P 64,000 Accounts receivable 200, ,000 Provision for doubtful accounts P 1,000 (5) 1,000 P 2,000 Inventories, ,000 P 223,000 Unexpired insurance, ,000 (6) 3,000 3,000 Land 220,000 (1) 10, ,000 Buildings 330,000 (1) 15, ,000 Accumulated Depreciation - Buildings 6,600 (3a) 300 (3b) 6,300 12,600 Machinery 148,000 (2) 3, ,000 Accumulated Depreciation - Machinery 15,000 (2) 1,000 (3b) 15,000 29,000 Sinking fund assets 25,000 (8) 23,500 (9) 1,500 50,000 Unamortized bond discount 25,000 (7) 5,000 20,000 Treasury shares, ordinary 35,000 (1) 35,000 - Accounts payable 88,000 88,000 Bond interest accrued 3,750 3,750 1st Mortgage, 6% SF Bonds 226,500 (8) 23, ,000 Ordinary shares 500, ,000 Premium on ordinary shares 50,000 50,000 Share donation 60,000 (1) 60,000 - Retained earnings, ,150 (7) 2,500 (3a) ,950 Sales 875,000 P 875,000 Purchases 283, ,500 Payroll 169, ,000 Factory operating expenses 121,500 (3b) 21,300 (6) 3, ,800 Administrative expenses 35,000 (5) 1,000 36,000 Bond interest expense 15,000 (7) 2,500 17,500 P1,900,000 P1,900,000 Loss on sale of machinery (2) 2,000 2,000 Merchandise inventory (4) 175,000 (4) 175, , ,000 Sinking fund income (9) 1,500 1,500 P 293,600 P 293,600 P 876,800 P1,051,500 P1,182,000 P1,007,300 Net Income 174, ,700 P1,051,500 P1,051,500 P1,182,000 P1,182,000

4 19-4 Solutions Manual to Accompany Applied Auditing, 2002 Edition Part I Adjusting Journal Entries, AJE (1) Depreciation expense 1,778 Accumulated depreciation 1,778 [(P22,000 P2,000) P4,000] 9 (2) Prepaid interest 5,000 Retained earnings 3,100 Interest expense 1,900 (3) Merchandise inventory, , BS 15,000 Merchandise inventory, , IS or Cost of Sales 15,000 (4) Retained Earnings 6,000 Purchases 6,000 (5) Prepaid insurance 3,000 Insurance expense 3,000 (6) Store supplies inventory 1,450 Store supplies expense 550 Retained earnings 900 (7) Retained earnings 730 Commissions expense 240 Accrued commissions payable 970 (8) Cash in bank 650 Miscellaneous income 650 (9) Purchases 800 Accounts payable 800 (10) Income from Investment 3,000 Investment 3,000 (11) Prepaid advertising and promotions 90,000 Advertising and promotions expense 90,000 (12) NO AJE (13) Machinery 20,000 Depreciation expense machinery 167 Allowance for depreciation machinery 167 Repairs and maintenance 20,000

5 Comprehensive Audit of Balance Sheet and Income Statement Accounts 19-5 (14) Miscellaneous income 2,000 Gain on sale of treasury shares 5,000 Land 2,000 Additional paid-in capital arising from Treasury Share transactions 5,000 (15) Doubtful accounts expense 14,500 Allowance for uncollectible accounts 14,500 Required allowance as of on past due accounts (5% x P30,000) on current accounts (1% x P400,000) Total Unadjusted debit balance of the Allowance account Additional Provision P 1,500 4,000 P 5,500 9,000 P14,500 Part II Column B Adjustment, AJE (a) Retained earnings xx Purchases (b) NONE xx (c) Retained Earnings xx Allowance for depreciation (d) Retained Earnings xx Allowance for depreciation (e) Machinery xx Retained earnings (f) Depreciation xx Allowance for depreciation (g) Retained earnings xx Taxes xx xx xx xx xx xx xx International Company AJE (1) Depreciation expense 3,200 Accumulated depreciation delivery vehicle 3,200 (2) Cost of sales 19,000 Retained earnings 19,000

6 19-6 Solutions Manual to Accompany Applied Auditing, 2006 Edition (3) Cost of sales 8,500 Inventory 8,500 (4) Cash 5,600 Accounts receivable 5,600 (5) Accumulated depreciation equipment 22,000 Equipment 18,300 Gain on sale of equipment 3,700 (6) Estimated litigation loss 125,000 Estimated litigation liability 125,000 (7) Unrealized holding gain or loss Income 2,000 Allowance for decline in value of securities 2,000 (8) Accrued salaries payable 3,800 Salaries expense 3,800 (9) Depreciation expense 4,000 Equipment 32,000 Repairs expense 32,000 Accumulated depreciation equipment 4,000 (10) Insurance expense 5,000 Prepaid insurance 7,000 Retained earnings 12,500 (11) No adjusting entry. Trademark has indefinite life and no amortization need be made Sunshine Cosmetics, Inc. Requirement (1) AJE (1) Inventory, Dec. 31, 2006 (BS) 67,200 Inventory, Dec. 31, 2006 (IS) or Cost of sales 67,200 (2) Doubtful accounts expense 14,920 Allowance for doubtful accounts (15, ) 14,920 (3) Accounts payable 20,760 Purchase returns and allowances 20,760

7 Comprehensive Audit of Balance Sheet and Income Statement Accounts 19-7 (4) Sales commissions 216 Accrued commissions payable 216 (5) Freight-in 1,600 Accounts payable 1,600 (6) Advertising expense 1,212 Prepaid advertising 1,212 (7) Freight-out or Expense 8,400 Sales 8,400 (8) Interest receivable 1,380 Interest income 1,380 (9) Depreciation expense 1,300 Accumulated depreciation 1,300 (10) Supplies expense 1,160 Unused Supplies 1,160 (11) Provision for Income tax expense 107,386 Income tax payable 107,386 Requirement (2) Sunshine Cosmetics, Inc. Income Statement For the Year Ended December 31, 2006 Revenue from sales: Sales P998,800 (a) Less: Sales returns and and allowances P 22,400 Sales discounts 1,760 24,160 P974,640 Cost of goods sold: Inventory, January 1 P179,400 Net purchases: Purchases P346,000 Less purchase returns and allowances 20,760 (c) 325,240 Freight-in 12,650 (b) Cost of goods available for sale P517,290 Less Inventory, December ,300 (d) 408,990 Gross profit on sales P565,650

8 19-8 Solutions Manual to Accompany Applied Auditing, 2006 Edition Other income: Interest revenue P 2,780 (i) Dividend revenue 14,300 Gain on sale of assets 37,000 54,080 Total income P619,730 Operating expenses: Selling expenses: Sales salaries and commissions P 70,216 (e) Advertising expense 33,392 (f) Depreciation expense Sales/delivery equipment 13,500 (g) Freight expense 8,400 Travel expense sales representatives 9,120 Miscellaneous selling expenses 4,400 P139,028 General and administrative expenses: Legal services P 4,450 Insurance and licenses 17,000 Depreciation expense office equipment 9,600 Utilities 12,800 Telephone and postage 2,950 Supplies expense 1,160 (k) Officers salaries 73,200 Doubtful accounts expense 14,920 (h) 136,080 Total operating expenses (275,108) Other expense and losses: Interest expense P 9,040 Loss on sale of equipment 45,200 (54,240) Income from continuing operations before income taxes P290,382 Income taxes 92,922 (j) Income from continuing operations P197,460 Discontinued operations: Gain from discontinued operations (net of income taxes of P25,600) 54,400 Net income P251,860

9 Comprehensive Audit of Balance Sheet and Income Statement Accounts 19-9 Earnings per ordinary share: Income from continuing operations (P197,460 78,000 shares) P2.53 Gain from discontinued operations (P54,400 78,000 shares) 0.70 Net income (P251,860 78,000 shares) P3.23 Computations: (a) Sales: P990,400 + P8,400 = P998,800 (b) Freight-in: P11,050 + P1,600 = P12,650 (c) Purchase returns and allowances: P346,000 x 6% = P20,760 (d) Inventory: P41,100 + P67,200 = P108,300 (e) Sales salaries and commissions: P70,000 + (P7,200 x 3%) = P70,216 (f) Advertising expense: P32,180 + (P3,636 x 2/6) = P33,392 (g) Depreciation expense: P12,200 + (P15,600 x 10/120) = P13,500 (h) Doubtful accounts expense: (P522,000 x 3%) P740 = P14,920 (i) Interest revenue: P1,400 + P1,380 = P2,780 (j) Income taxes: P335,582 x 32% = P107,387 (k) Supplies expense: P4,360 P3,200 = P1,160 Sunshine Cosmetics, Inc. Retained Earnings Statement For the Year Ended December 31, 2006 Retained earnings, January 1 P 881,340 Add net income per income statement 251,860 P1,133,200 Deduct dividends paid 66,000 Retained earnings, December 31 P1,067, Del Bakery Working papers are not required, but they facilitate the preparation of a corrected balance sheet. Del Bakery Working Papers for Corrected Balance Sheet December 31, 2007 Balance Sheet Corrections Corrected Balance Sheet Account Title Debit Credit Debit Credit Debit Credit Current Assets... 53, (a) 53, Current Liabilities ,000 (c) 29, Other Assets... 75, (b) 75, Other Liabilities ,600 (d) 3, Investment in Business ,935 (e) 95, , ,

10 19-10 Solutions Manual to Accompany Applied Auditing, 2006 Edition Cash (a) 10, , Investment Securities trading (at market value) (a) 2, , Trade Accounts Receivable (a) 12, , Inventory (a) 8, , Supplies Inventory (a) Delivery Truck (a) 2, , Fixtures (a) 12, , Accumulated Depreciation Fixtures (a) 2, ,100 Cash Surrender Value of Insurance on Officers Lives (a) 4, , Retained Earnings (a) 2, (b) 7, (d) , (e) 40, Land (b) 30, , Buildings (b) 62, , Accumulated Depreciation Buildings [2 ½ (P62,000 20)] (b) 7, ,750 11% Mortgage Payable (b) 12, ,000 11% Mortgage Payable (current portion) (b) 4, ,000 Interest Payable (b) Trade Accounts Payable (c) 29, ,000 Miscellaneous Liabilities (d) 3, ,950 Share Capital, P5 stated value, 5,000 shares (e) 25, ,000 Paid-in Capital from Sale of Shares at More Than Stated Value (e) 30, , , , , ,840 Corrections: (a) To restate current assets (d) To restate other liabilities (b) To restate other assets (e) To restate owners equity accounts (c) To restate current liabilities Del Bakery Corrected Balance Sheet December 31, 2007 Assets Current assets: Cash... P10,600 Investment securities trading (reported at market; cost P4,250)... 2,575 Trade accounts receivable (fully collectible)... 12,500 Inventory... 8,040 Supplies inventory P 34,140

11 Comprehensive Audit of Balance Sheet and Income Statement Accounts Investments: Cash surrender value of life insurance... 4,100 Land, buildings and equipment: Land... P30,000 Buildings... P62,000 Less accumulated depreciation... 7,750 54,250 Fixtures... P12,500 Less accumulated depreciation... 2,100 10,400 Delivery truck... 2,100 96,750 Total assets... P134,990 Liabilities Current liabilities: Mortgage payable, portion due this year... P 4,000 Accounts payable... 29,000 Interest payable Miscellaneous accrued liabilities... 3,950 P 37,830 11% Mortgage payable (noncurrent portion)... 12,000 Total liabilities... P 49,830 Owners Equity Contributed capital: Share capital, P5 stated value, 5,000 shares... P25,000 Paid-in capital from sale of ordinary shares at more than stated value... 30,000 P55,000 Retained earnings... 30,160 Total owners equity... 85,160 Total liabilities and owners equity... P134, Masipag Corporation Adjusting Journal Entries, Dec. 31, 2007 AJE (1) Cash 200,000 Accounts payable 200,000 (2) Accounts receivable 10,000 Cash 10,000 (3) Bank loan payable 400,000 Other expenses 12,500 Cash 412,500

12 19-12 Solutions Manual to Accompany Applied Auditing, 2006 Edition (4) Cash 75,000 Accounts receivable 75,000 (5) Operating expenses 1,500 Cash 1,500 (6) Cash 16,000 Other income 16,000 (7) Accounts receivable others (2, ,000) 5,000 Operating expenses 2,000 Cash 7,000 (8) Marketable securities 40,000 Other income 40,000 (9) Other income 54,000 Marketable securities 54,000 (10) Marketable securities 32,000 Other income 32,000 (10.a) Valuation allowance Marketable securities Trading 145,600 Other income Unrealized holding gain 145,600 (11) Sales 500,000 Accounts receivable 500,000 (12) Inventory 400,000 Cost of sales 400,000 (13) Accounts receivable others (30,000 15,000) 15,000 Accounts receivable 15,000 (14) Accounts receivable others 55,000 Accounts receivable 55,000 (15) Accounts receivable 50,000 Other current liabilities 50,000 (16) Operating expenses 21,900 Allowance for doubtful accounts 21,900 (17) Other income 54,545 Discount on notes receivable 54,545 (18) Discount on notes receivable 4,545 Other income 4,545

13 Comprehensive Audit of Balance Sheet and Income Statement Accounts (19) Cost of sales 60,000 Accounts payable 60,000 (20) Cost of sales 25,000 Accounts payable 25,000 (21) Inventory 25,000 Cost of sales 25,000 (22) Accounts receivable others 16,000 Inventory 16,000 (23) Sales 13,000 Accounts receivable 13,000 (24) Operating expenses 46,250 Prepaid expenses 46,250 (25) Operating expenses 5,000 Prepaid expenses 5,000 (26) Other assets 60,000 Operating expense 120,000 Prepaid expenses 180,000 (27) Long-term bond investment 5,777 Other income 5,777 (28) Accounts receivable others 5,333 Other income 5,333 (29) Land 1,062,500 Building 3,187,500 Land and building 4,250,000 (30) Building 425,000 Land and building 425,000 (31) Operating expenses 20,000 Land and building 20,000 (32) Operating expenses 27,500 Prepaid expenses 27,500 Land and building 55,000

14 19-14 Solutions Manual to Accompany Applied Auditing, 2006 Edition (33) Land and building 237,500 Operating expenses 115,578 Accumulated depreciation building 121,922 (34) Prepaid expenses 10,000 Operating expenses 10,000 Equipment 20,000 (35) Operating expenses 55,400 Accumulated depreciation equipment 55,400 (36) Accounts payable 50,000 Other current liabilities 50,000 (37) Operating expenses 15,000 Estimated liability on warranties 15,000 (38) Other current liabilities 50,000 Other expenses 50,000 (39) Income taxes payable 115,290 Provision for income tax 115,290 Assets MASIPAG CORPORATION Balance Sheet December 31, 2007 Current assets Cash P 734,000 Marketable securities P 400,000 Valuation allowance 145, ,600 Accounts receivable P 442,000 Allowance for doubtful accounts (33,150) 408,850 Notes receivable P 600,000 Discount on notes receivable (50,000) 550,000 Accounts receivable others 96,333 Inventory, December 31, ,960,500 Prepaid expenses 175,250 Total current assets P4,470,533 Investments Long-term bond investment 744,077 Property, plant and equipment Land P1,062,500 Building P3,612,500 Accumulated depreciation Building (121,922) 3,490,578

15 Comprehensive Audit of Balance Sheet and Income Statement Accounts Equipment P1,654,000 Accumulated depreciation Equipment (235,400) 1,418,600 Total property, plant and equipment 5,971,678 Other assets 110,000 Total assets P11,296,288 Liabilities and Shareholders Equity Current liabilities Accounts payable P 877,000 Bank loan payable 1,100,000 Accrued expenses payable 59,000 Other current liabilities 100,000 Income taxes payable 130,558 Estimated liability on warranties 70,000 Total current liabilities P 2,336,558 Shareholders equity Ordinary shares P5,000,000 Additional paid-in capital 1,655,250 Retained Earnings 2,304,480 Total shareholders equity 8,959,730 Total liabilities and shareholders equity P11,296,288 MASIPAG CORPORATION Income Statement For the Year Ended December 31, 2007 Sales P 6,437,000 Cost of sales (4,060,000) Gross profit P 2,377,000 Other income 225,710 Operating expenses (1,511,509) Other expenses (37,500) Income before taxes P 1,053,701 Provision for income tax (342,441) Net Income P 711, Felicity Company Adjusting Journal Entries, Dec. 31, 2007 AJE (1) Cash 31,000 Prepaid interest 3,000 Other charges 2,000 Long-term debt (current portion) 24,000 Long-term debt 12,000

16 19-16 Solutions Manual to Accompany Applied Auditing, 2006 Edition (2) Cash 2,000 Accounts payable and others 2,000 (3) Investments in SMC shares available for sale (non-current) 72,000 Marketable securities 72,000 (4) Unrealized loss due to decline in value of non-current investment (equity) 20,000 Operating expenses 20,000 (5) Allowance for doubtful accounts 41,100 Operating expenses 41,100 (6) Accounts receivable 8,000 Operating expenses 8,000 (7) Inventory 12,000 Cost of sales 12,000 (8) Sales 14,400 Accounts receivable 14,400 (9) Revaluation increment 120,000 Accumulated depreciation 80,000 Property and equipment 200,000 (10) Accumulated depreciation 36,000 Operating expenses 36,000 (11) Operating expenses 48,000 Accumulated depreciation 48,000 (12) Revaluation increment 24,000 Retained earnings 24,000 (13) Property and equipment 30,000 Operating expenses 30,000 (14) Retained earnings 13,000 Cumulative effect of change in accounting principle 13,000 (15) Accounts receivable others 22,000 Cash 22,000

17 Comprehensive Audit of Balance Sheet and Income Statement Accounts (16) Provision for income tax 25,445 Income tax payable 25,445 FELICITY COMPANY Balance Sheet December 31, 2007 Assets Current Assets: Cash... P 123,600 Accounts receivable... 1,751,820 Allowance for doubtful accounts... (27,000) Accounts receivable -others... 62,000 Inventories ,000 Prepaid interest... 3,000 Non-current Assets: Advances to affiliate... 48,000 Investments in SMC shares available for sale... 72,000 Allowance for decline in value of non-current investment... (20,000) Property and equipment... 2,600,000 Accumulated depreciation... (1,172,000) Total Assets P 3,703,420 Liabilities and Shareholders Equity Accounts payable and others (including current portion of bank loan of P24,000)... P 434,616 Income tax payable ,205 Long-term debt... 72,000 Ordinary share capital... 2,042,000 Retained earnings ,599 Unrealized loss due to decline in value of investment in SMC... (20,000) Revaluation increment... 96,000 Total Liabilities and Shareholders Equity P 3,703,420 FELICITY COMPANY Income Statement For the Year Ended December 31, 2007 Sales... P 2,757,124 Cost of sales... 2,257,604 Gross profit... P 499,520 Operating expenses... (83,522) Other charges... (102,000)

18 19-18 Solutions Manual to Accompany Applied Auditing, 2006 Edition Income from continuing operations before tax... P 313,998 Provision for income tax (35%) ,899 Income from continuing operations after tax... P 204,099 Discontinued operations (net)... (6,500) Net income... P 197, Learn Company Condensed Comparative Income Statements Construction revenue P900,000 P420,000 P200,000 Construction expense (420,000) (182,000) (80,000) Other expenses (80,000) (70,000) (50,000) Income before income taxes P400,000 P168,000 P 70,000 Income tax expense (120,000) (50,400) (21,000) Net income P280,000 P117,600 P 49,000 Comparative Statements of Retained Earnings Balance at beginning of year, as previously reported P 77,000 P 7,000 P 0 Add: Adjustment for the cumulative effect on prior years of applying retroactively the new method of accounting for long-term contracts (net of income taxes) 89,600 b 42,000 a 0 Balance at beginning of year, as adjusted P166,600 P 49,000 P 0 Net income 280, ,600 49,000 Balance at end of year P446,600 P166,600 P 49,000 Note: The company has accounted for revenue and costs for long-term construction contracts by the percentage-of-completion method in 2009, whereas in prior years revenues and costs were determined by the completed-contract method. The new method of accounting for long-term contracts was adopted to (state justification for change in accounting principle) and financial statements of prior years have been restated to apply the new method retroactively. The effect

19 Comprehensive Audit of Balance Sheet and Income Statement Accounts of the accounting change on income of 2009 and on income as previously reported in 2007 and 2008 is as follows: Increase Net income P112,000 c P47,600 P42,000 Earnings per ordinary share P11.20 P4.76 P4.20 The balances of retained earnings for 2008 and 2009 have been adjusted for the after-tax effect of applying the new method of accounting retroactively. a P49,000 P7,000 b (P49,000 + P117,600) (P7,000 + P70,000) c P280,000 [(P600,000 P280,000 P80,000) x (1 0.30)] Goody Construction Company Requirement (1) 2007 Jan. 1 Construction in Progress 70,000 a Retained Earnings [P70,000 x (1 0.30)] 49,000 Deferred Tax Asset 21,000 a [(P100,000 + P120,000) + (P125,000 + P75,000)] (P100,000 + P250,000) Requirement (2) GOODY CONSTRUCTION COMPANY Condensed Comparative Income Statements (Partial) Income before income taxes P400,000 P200,000 P220,000 Income taxes at 30% (120,000) (60,000) (66,000) Net income P280,000 P140,000 P154,000 Earnings per ordinary share (100,000 shares) P2.80 P1.40 P1.54

20 19-20 Solutions Manual to Accompany Applied Auditing, 2006 Edition Comparative Statements of Retained Earnings Balance at beginning of year, as previously reported P245,000 c P 70,000 b P 0 Add: Adjustment for the cumulative effect on prior years of applying retroactively applying the new method of accounting for long-term contracts (net of income taxes) 49,000 e 84,000 d 0 Balance at beginning of year, as adjusted P294,000 P154,000 P 0 Net income 280, , ,000 Balance at end of year P574,000 P294,000 P154,000 b P100,000 x (1 0.30) c P250,000 x (1 0.30) + P70,000 d [(P100,000 + P120,000) P100,000] x (1 0.30) e [(P100,000 + P120,000 + P125,000 + P75,000) (P100,000 + P250,000)] x (1 0.30) Note: The company has accounted for revenue and costs for long-term construction contracts by the percentage-of-completion method in 2007, whereas in prior years revenues and costs were determined by the competed-contract method. The new method of accounting for long-term contracts was adopted to (state justification for change in accounting principle) and financial statements of prior years have been restated to apply the new method retroactively. The effect of the accounting change on income of 2007 and on income as previously reported in 2005 and 2006 is as follows: Increase Net income P(49,000) h P(35,000) g P84,000 f Earnings per ordinary share P(0.49) P(0.35) P0.84 The balances of retained earnings and deferred taxes for 2006 and 2007 have been adjusted for the after-tax effect of applying the new method of accounting retroactively: f (P220,000 P100,000) x (1 0.30) g (P200,000 P250,000) x (1 0.30) h [P400,000 (P820,000 P350,000)] x (1 0.30)

21 Comprehensive Audit of Balance Sheet and Income Statement Accounts Items Restated: On the 2005 and 2006 income statements, construction revenues and expenses would be restated to the appropriate amounts for the percentage of completion method. The construction in progress, deferred income taxes, and retained earnings on the balance sheets would also be restated Sand Company Requirement (1) a. Incorrect entries: Building 60,000 Notes Payable 60,000 Depreciation Expense: Building (P60,000 30) 2,000 Accumulated Depreciation: Building 2,000 Correct entries: Building 40,981 a Discount on Notes Payable 19,019 Notes Payable 60,000 a P60,000 x Depreciation Expense: Building 1,366 b Interest Expense 4,098 c Accumulated Depreciation 1,366 Discount on Notes Payable 4,098 b P40, c Interest computed using effective interest method: 10% x P40,981 Entries to correct error: Discount on Notes Payable 19,019 Building 19,019 Accumulated Depreciation: Building 634 Interest Expense 4,098 Depreciation Expense: Building 634 Discount on Notes Payable 4,098 b. Retained Earnings 40,000 Cost of Goods Sold 40,000 To correct error from prior year.

22 19-22 Solutions Manual to Accompany Applied Auditing, 2006 Edition Cost of Goods Sold 15,000 Inventory 15,000 To correct error in current year. c. The error from 2005 was counterbalanced at the end of 2006, so it can be ignored. Retained earnings 18,000 Salaries and Wages Expense 18,000 To correct error in salary and wage accrual in Salaries and Wages Expense 10,000 Salaries and Wages Payable 10,000 To accrue salaries and wages at December 31, Requirement (2) a. See Requirement 1.a. of this solution for the incorrect entries that were made and the correct entries that should have been made. Discount on Notes Payable (total discount of P19,019 less amount of P4,098 amortized for 2007) 14,921 Accumulated Depreciation: Building 634 Retained Earnings 3,464 d Building 19,019 d Correction of interest expense understatement of P4,098 less depreciation overstatement of P634 b. The error from 2006 was counterbalanced by the end of 2005, so it can be ignored. Retained Earnings 15,000 Inventory 15,000 c. The errors from 2005 and 2006 were counterbalanced by the end of 2006 and 2007; respectively, so they can be ignored. Retained Earnings 10,000 Salaries and Wages Payable 10,000

23 Comprehensive Audit of Balance Sheet and Income Statement Accounts Play Company Requirement (1) SFAS No. 13 paragraphs 42 and 43 state that a change in accounting policy should be applied retroactively unless the amount of any resulting adjustment that relates to prior periods is not reasonably determinable. Any resulting adjustment should be reported as an adjustment to the opening balance of retained earnings. Comparative information should be restated unless it is impracticable to do so. The financial statements, including the comparative information for prior periods, are presented as if the new accounting policy had always been in use. Therefore, comparative information is restated in order to reflect the new accounting policy. The amount of the adjusting relating to periods prior to those included in the financial statements is adjusted against the opening balance of retained earnings of the earliest period presented. Any other information with respect to prior periods, such as historical summaries of financial data, is also restated. PLAY COMPANY Worksheet to Correct Income Before Income Taxes Year Ended December Income before income taxes, before adjustments P4,030,000 P3,330,000 Adjustments: Depreciate certain equipment over 8-year life instead of 10-year life (Schedule 1) (25,000) -- Correct 2006 error 180,000 (180,000) Record 2007 provision for doubtful accounts (P58,500,000 x 0.2%) (117,000) -- Increase estimated warranty liability (170,000) -- Effect of change in accounting principle from expensing to capitalizing relining costs in the year of the change (Schedule 2) Furnace A (Jan. 2006) (56,000) 224,000 Furnace B (Jan. 2007) 240, Net adjustments 52,000 44,000 Income before income taxes P4,082,000 P3,374,000 Schedule 1: Computation of Adjusted Depreciation Cost of equipment (no salvage value) P1,000,000 Depreciation based on 10-year life P 100,000 Depreciation based on 8-year life (125,000) Adjustment P (25,000)

24 19-24 Solutions Manual to Accompany Applied Auditing, 2006 Edition Schedule 2: Computation of Effect of Change in Accounting Principle From Expensing to Capitalizing Relining Costs on the Year of the Change Capitalization of Furnace B P300,000 Depreciation on Furnace B based on 5-year life (P300,000 x 20%) (60,000) Depreciation on Furnace A based on 5-year life (P280,000 x 20%) (56,000) Adjustment P184,000 Requirement (2) PLAY COMPANY Effect Before Income Taxes of Change in Accounting Principle From Expensing to Capitalizing Relining Costs For Year Ended December 31, 2007 Capitalization of Furnace A P280,000 Depreciation on Furnace A based on 5-year life (P280,000 x 20%) (56,000) Adjustment P224, Jo Francisco, Inc. Net Income for 2005 Retained Earnings 12/31/06 Item Understated Overstated Understated Overstated 1. P14, P 7,000 0 P 5, P22,000 0 P11, P33,000 0 P33, P20,000 0 P10, P18, Although explanations were not required in answering the question, they are included below for your interest. Explanations: 1. The net income would be understated in 2005 because interest income is understated. The net income would be overstated in 2006 because interest income is overstated. The errors, however, would counterbalance (wash) so that the Balance Sheet (Retained Earnings) would be correct at the end of 2006.

25 Comprehensive Audit of Balance Sheet and Income Statement Accounts The depreciation expense in 2005 should be P1,000 for this machine. Since the machine was bought on July 1, 2005, only one-half of a year should be taken in 2005 (P8,000/4 X 1/2 = P1,000). The company expensed P8,000 instead of P1,000 so net income is understated by P7,000 in An additional P2,000 of depreciation expense should have been taken in At the end of 2006, retained earnings would be understated by P5,000 (P7,000 P2,000). 3. PAS 38, paragraphs 54 to 57 govern the accounting for research and development costs. Net income in 2005 is overstated P22,000 (P33,000 research and development costs capitalized less P11,000 amortized). By the end of 2006, only P11,000 of the research and development costs would remain as an asset. Therefore, retained earnings would be overstated by P11,000 (P33,000 research and development costs P22,000 amortized). 4. The security deposit should be a long-term asset, called refundable deposits. The P8,000 of last month s rent is also an asset, called prepaid rent. The net income of 2005 is understated by P33,000 (P25,000 + P8,000) because these amounts were expensed. Retained earnings will continue to be understated by P33,000 until the last year of the lease. The security deposit will then be refunded, and the last month s rent should be expensed. 5. P10,000 or one-third of P30,000 should be reported as income each year. In 2005, P30,000 was reported as income when only P10,000 should have been reported. Because P20,000 too much was reported, the net income of 2005 is overstated. At the end of 2006, P20,000 should have been reported as income, so retained earnings is still overstated by P10,000 (P30,000 P20,000). 6. The ending inventory would be understated since the merchandise was omitted. Because ending inventory and net income have a direct relationship, net income in 2005 would be understated. The ending inventory of 2005 becomes the beginning inventory of If beginning inventory of 2006 is understated, then net income of 2006 is overstated (inverse relationship). The omission in inventory over the two-year period will counterbalance, and retained earnings at the end of 2006 will be correct JC Patrick Corporation Net income, as reported P29,000 P37,000 Rent received in 2006, earned in 2007 (1,300) 1,300 Wages not accrued, 12/31/05 1,100 Wages not accrued, 12/31/06 (1,500) 1,500 Wages not accrued, 12/31/07 (940) Inventory of supplies, 12/31/05 (1,300) Inventory of supplies, 12/31/ (740) Inventory of supplies, 12/31/07 1,420 Corrected net income P26,740 P39,540

E23-1 Identification of Changes and Errors. (Easy) Indicate how to report various items, whether increases or decreases are to be expected.

E23-1 Identification of Changes and Errors. (Easy) Indicate how to report various items, whether increases or decreases are to be expected. CHAPTER 23 ACCOUNTING FOR CHANGES AND ERRORS CONTENT ANALYSIS OF EXERCISES AND PROBLEMS Number Content Time Range (minutes) E23-1 Identification of Changes and Errors. (Easy) Indicate how to report various

More information

Chart of Accounts. Chart of Accounts

Chart of Accounts. Chart of Accounts Chart of Accounts A company s Chart of Accounts is a list of all Asset, Liability, Equity, Revenue, and Expense accounts included in the company s General Ledger. The number of accounts included in the

More information

Chapter 2 Review of the Accounting Process

Chapter 2 Review of the Accounting Process Intermediate Accounting 8th Edition Spiceland Solutions Manual Full Download: http://testbanklive.com/download/intermediate-accounting-8th-edition-spiceland-solutions-manual/ Chapter 2 Review of the Accounting

More information

CHAPTER 22. Accounting Changes and Error Analysis

CHAPTER 22. Accounting Changes and Error Analysis CHAPTER 22 Accounting Changes and Error Analysis OPTIONAL ASSIGNMENT CHARACTERISTICS TABLE Item BE22-1 BE22-3 BE22-6 BE22-8 Description Change in principle long-term contracts (tax effect deferred tax

More information

Chapter 2 Review of the Accounting Process

Chapter 2 Review of the Accounting Process Intermediate Accounting 9th Edition Spiceland Solutions Manual Full Download: http://testbanklive.com/download/intermediate-accounting-9th-edition-spiceland-solutions-manual/ Chapter 2 Review of the Accounting

More information

CHAPTER 22. Accounting Changes and Error Analysis ASSIGNMENT CLASSIFICATION TABLE. Brief Exercises Exercises Problems Cases 3 1, 2, 3, 4, 5

CHAPTER 22. Accounting Changes and Error Analysis ASSIGNMENT CLASSIFICATION TABLE. Brief Exercises Exercises Problems Cases 3 1, 2, 3, 4, 5 CHAPTER 22 Accounting Changes and Error Analysis ASSIGNMENT CLASSIFICATION TABLE Topics 1. Differences between change in principle, change in estimate, change in entity, errors. Questions 2, 4, 5, 6, 7,

More information

Chapter 2 Review of the Accounting Process

Chapter 2 Review of the Accounting Process Chapter 2 Review of the Accounting Process QUESTIONS FOR REVIEW OF KEY TOPICS Question 2 1 External events involve an exchange transaction between the company and a separate economic entity. For every

More information

REINFORCEMENT ACTIVITY 3, Part B, p. 715

REINFORCEMENT ACTIVITY 3, Part B, p. 715 REINFORCEMENT ACTIVITY 3, Part B, p. 715 10. Unadjusted Trial Balance December 31, 20X4 ACCOUNT TITLE DEBIT CREDIT Cash 25 0 0 1 40 Petty Cash 4 0 0 00 Accounts Receivable 15 7 8 9 20 Allowance for Uncollectible

More information

Chapter 2 Review of the Accounting Process

Chapter 2 Review of the Accounting Process Chapter 2 Review of the Accounting Process QUESTIONS FOR REVIEW OF KEY TOPICS Question 2 1 External events involve an exchange transaction between the company and a separate economic entity. For every

More information

COMPREHENSIVE EXAMINATION A PART 1 (Chapters 1-6)

COMPREHENSIVE EXAMINATION A PART 1 (Chapters 1-6) COMPREHENSIVE EXAMINATION A PART 1 (Chapters 1-6) Problem A-I Multiple Choice. Choose the best answer for each of the following questions and enter the identifying letter in the space provided. 1. 2. 3.

More information

Chapter 2 Review of the Accounting Process

Chapter 2 Review of the Accounting Process Chapter 2 Review of the Accounting Process AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments, and faculty

More information

COMPREHENSIVE EXAMINATION A PART 1 (Chapters 1-6)

COMPREHENSIVE EXAMINATION A PART 1 (Chapters 1-6) COMPREHENSIVE EXAMINATION A PART 1 (Chapters 1-6) Problem A-I Multiple Choice. Choose the best answer for each of the following questions and enter the identifying letter in the space provided. 1. How

More information

CHAPTER 3 THE ACCOUNTING INFORMATION SYSTEM. MULTIPLE CHOICE Conceptual. Test Bank Chapter 3

CHAPTER 3 THE ACCOUNTING INFORMATION SYSTEM. MULTIPLE CHOICE Conceptual. Test Bank Chapter 3 CHAPTER 3 THE ACCOUNTING INFORMATION SYSTEM MULTIPLE CHOICE Conceptual Answer No. Description d 1. Purpose of an accounting system. d 2. Criteria for recording events. c 3. Purpose of trial balance. b

More information

Balance Sheet. 6th Fiscal Year (as of Dec ) 5th Fiscal Year (as of Dec )

Balance Sheet. 6th Fiscal Year (as of Dec ) 5th Fiscal Year (as of Dec ) Balance Sheet 6th Fiscal Year (as of Dec. 31 2006) 5th Fiscal Year (as of Dec. 31 2005) 6th year 5th year ASSETS I. CURRENT ASSETS 501,121,703,544 514,731,203,929 (1) Quick assets 400,439,958,565 446,840,327,827

More information

October 20, 2004 Anderson ECON 136A Midterm #1 Name

October 20, 2004 Anderson ECON 136A Midterm #1 Name October 20, 2004 Anderson ECON 136A Midterm #1 Name Please write your name, perm # and ECON 136A Fall 2004 on both your scantron and blue-book. You may take this exam with you. Answer the multiple choice

More information

Financial Reporting and Analysis Chapter 2 Solutions Accrual Accounting and Income Determination Exercises

Financial Reporting and Analysis Chapter 2 Solutions Accrual Accounting and Income Determination Exercises Financial Reporting and Analysis Chapter 2 Solutions Accrual Accounting and Income Determination Exercises Exercises E2-1. Determining accrual and cash basis revenue Since the subscription begins with

More information

Financial Reporting and Analysis (7 th Ed.) Chapter 2 Solutions Accrual Accounting and Income Determination Exercises

Financial Reporting and Analysis (7 th Ed.) Chapter 2 Solutions Accrual Accounting and Income Determination Exercises Financial Reporting and Analysis (7 th Ed.) Chapter 2 Solutions Accrual Accounting and Income Determination Exercises Exercises E2-1. Distinguishing accrual-basis revenue from cash receipts (AICPA adapted)

More information

Correction of Errors Principles of Accounting B.Com Part I Sameer Hussain

Correction of Errors Principles of Accounting B.Com Part I Sameer Hussain Correction of Errors Principles of Accounting B.Com Part I www.facebook.com/a4accounting.net WHAT THE EXAMINER USUALLY ASK? Types of errors: o Error of omission. o Error of commission. o Error of principle.

More information

RETAIL FINANCIAL SERVICES 2301 COUNTRY CLUB DR SUITE A STEVENS POINT, WI NO NAME ROAD COMPARISONS AS OF 05/31/12 ANYWHERE, USA

RETAIL FINANCIAL SERVICES 2301 COUNTRY CLUB DR SUITE A STEVENS POINT, WI NO NAME ROAD COMPARISONS AS OF 05/31/12 ANYWHERE, USA RETAIL FINANCIAL SERVICES 2301 COUNTRY CLUB DR SUITE A STEVENS POINT, WI 54481-8033 TO: ANY HARDWARE, INC FINANCIAL REPORTS & TWO YEAR NO NAME ROAD COMPARISONS AS OF 05/31/12 ANYWHERE, USA TWO YEAR COMPARISONS

More information

Adjustments, Financial Statements and the Quality of Earnings

Adjustments, Financial Statements and the Quality of Earnings Adjustments, Financial Statements and the Quality of Earnings Chapter 4 Accounting Cycle 4-2 1 Unadjusted Trial Balance Listing of all the balance sheet and income statement accounts, usually in financial

More information

Analyzing and Recording Transactions QUESTIONS

Analyzing and Recording Transactions QUESTIONS Chapter 2 Analyzing and Recording Transactions QUESTIONS 1. a. Common asset accounts: cash, accounts receivable, notes receivable, prepaid expenses (rent, insurance, etc.), office supplies, store supplies,

More information

Fin621 Online Quizzes & Papers GURU

Fin621 Online Quizzes & Papers GURU 1.If the inventory shrinkage at the end of the year is overstated by $7,500, the error will cause an: A.. understatement of net income for the year by $7,500 B.. understatement of cost of merchandise sold

More information

Financial Accounting. (Exam)

Financial Accounting. (Exam) Financial Accounting (Exam) Your AccountingCoach PRO membership includes lifetime access to all of our materials. Take a quick tour by visiting www.accountingcoach.com/quicktour. Table of Contents (click

More information

Accounting principle/ concept. 1 Change the depreciation methods for non-current assets Consistency

Accounting principle/ concept. 1 Change the depreciation methods for non-current assets Consistency 1 (a) Insurance account 1 April 2014 Balance b/d 500 31 March 2015 I/S 4350 31 March 2015 Bank 4000 Balance c/d 150 4500 4500 1 April 2015 Balance b/d 150 Commission receivable account 31 March 2015 Income

More information

FORENSIC ACCOUNTING VERSION

FORENSIC ACCOUNTING VERSION FORENSIC ACCOUNTING VERSION Fraudulent or incorrect transactions are presented below. Your job as a forensic accountant is to correct the financial statements and determine how income and total assets

More information

5. Consolidated Financial Statements (1) Consolidated Balance Sheets

5. Consolidated Financial Statements (1) Consolidated Balance Sheets 5. Consolidated Financial Statements (1) Consolidated Balance Sheets March 31, 2008 Assets Current assets Cash and deposits 84,224 89,218 Notes and accounts receivable-trade 230,156 234,862 Lease receivables

More information

PANCHAKSHARI S PROFESSIONAL ACADEMY PVT LTD (Your Lifelong Knowledge Partner )

PANCHAKSHARI S PROFESSIONAL ACADEMY PVT LTD (Your Lifelong Knowledge Partner ) 50 Questions 50 Marks 60 Minutes Rectification of Error Select the best choice to answer the following questions: 1. Which of the following statement is/are correct? (i) A separate suspense account should

More information

Chapter 4 Question Review 1

Chapter 4 Question Review 1 Chapter 4 Question Review 1 Chapter 4 Questions Multiple Choice 1. The final step in the accounting cycle is to prepare: a. closing entries. b. financial statements. c. a post-closing trial balance. d.

More information

COMPREHENSIVE EXAMINATION A (Chapters 1 5)

COMPREHENSIVE EXAMINATION A (Chapters 1 5) COMPREHENSIVE EXAMINATION A (Chapters 1 5) Problem A - I Multiple Choice 1. A private organization which establishes broad accounting principles as well as specific accounting rules is a. the Securities

More information

www.assignmentstudio.net WhatsApp: +61-424-295050 Toll Free: 1-800-794-425 Email: contact@assignmentstudio.net Follow us on Social Media Facebook: https://www.facebook.com/assignmentstudio Twitter: https://twitter.com/assignmentstudi

More information

INTERNATIONAL INDIAN SCHOOL RIYADH

INTERNATIONAL INDIAN SCHOOL RIYADH INTERNATIONAL INDIAN SCHOOL RIYADH ACCOUNTANCY WORK SHEET 8 CLASS 11 CHAPTER: FINANCIAL STATEMENTS Q.1 Find out (a) Cost of goods sold (b) Closing Stock. Opening Stock 15,000 Sales 1350,000 Purchases 1050,000

More information

B EXERCISES (L0 1) (L0 1)

B EXERCISES (L0 1) (L0 1) B EXERCISES (L0 1) (L0 1) (L0 2) 3) E4-1B (Computation of Net Income) Presented below are changes in all the account balances of Chris Park Furniture Co. during the current year, except for retained earnings.

More information

2016 EXAMINATIONS KNOWLEDGE LEVEL PAPER 1: ACCOUNTING FRAMEWORK

2016 EXAMINATIONS KNOWLEDGE LEVEL PAPER 1: ACCOUNTING FRAMEWORK EXAMINATION NO 2016 EXAMINATIONS NOWLEDGE LEVEL PAPER 1: ACCOUNTING FRAMEWOR TUESDAY 7 JUNE 2016 TIME ALLOWED : 3 HOURS 9.00AM - 12.00 NOON INSTRUCTIONS: 1. You are allowed 15 minutes reading time before

More information

Bookkeeping (Explanation)

Bookkeeping (Explanation) Bookkeeping (Explanation) 1. Part 1 Introduction; Bookkeeping: Past and Present 2. Part 2 Accrual Method 3. Part 3 Double-Entry, Debits and Credits 4. Part 4 General Ledger Accounts 5. Part 5 Debits and

More information

Analyzing and Recording Transactions QUESTIONS

Analyzing and Recording Transactions QUESTIONS Chapter 2 Analyzing and Recording Transactions QUESTIONS 1. a. Common asset accounts: cash, accounts receivable, notes receivable, prepaid expenses (rent, insurance, etc.), office supplies, store supplies,

More information

3. CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS

3. CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS 3. CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS (1) Consolidated Quarterly Balance Sheets September 30, 2013 and March 31, 2013 March 31, 2013 September 30, 2013 Assets Current assets Cash and deposits

More information

SCHOOL OF ACCOUNTING AND BUSINESS BSc. (APPLIED ACCOUNTING) GENERAL / SPECIAL DEGREE PROGRAMME

SCHOOL OF ACCOUNTING AND BUSINESS BSc. (APPLIED ACCOUNTING) GENERAL / SPECIAL DEGREE PROGRAMME All Rights Reserved No. of Pages - 12 No of Questions - 06 SCHOOL OF ACCOUNTING AND BUSINESS BSc. (APPLIED ACCOUNTING) GENERAL / SPECIAL DEGREE PROGRAMME YEAR I SEMESTER I (INTAKE VI GROUP B) END SEMESTER

More information

Ray Sigorta Anonim Şirketi Balance Sheet As At 30 June 2016 (Currency: Turkish Lira (TL))

Ray Sigorta Anonim Şirketi Balance Sheet As At 30 June 2016 (Currency: Turkish Lira (TL)) Balance Sheet ASSETS Current Period 30 June 2016 Audited 31 December 2015 I- Current Assets A- Cash and Cash Equivalents 280.951.812 226.401.451 1- Cash 53.648 45.712 2- Cheques Received 12 12 3- Banks

More information

MTP_Intermediate_Syllabus 2016_June2019_Set1 Paper 5- Financial Accounting

MTP_Intermediate_Syllabus 2016_June2019_Set1 Paper 5- Financial Accounting Paper 5- Financial Accounting Dos, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 1 Paper 5- Financial Accounting Full Marks : 100 Time allowed: 3 hours Section

More information

ACCT-112 Final Exam Practice Solutions

ACCT-112 Final Exam Practice Solutions ACCT-112 Final Exam Practice Solutions Question 1 Jan 1 Cash 200,000 H. Happee, Capital 200,000 Jan 2 Prepaid Insurance 10,000 Cash 10,000 Jan 15 Equipment 15,000 Cash 5,000 Notes Payable 10,000 Jan 30

More information

Financial Statements and Closing Entries for a Merchandising Business

Financial Statements and Closing Entries for a Merchandising Business Ch.10 Financial Statements and Closing Entries for a Merchandising Business o Prepare financial statements for a merchandising business o Journalize adjusting and closing entries for a merchandising business

More information

Chapter 3 The Adjusting Process

Chapter 3 The Adjusting Process Instant download and all chapters Solution Manual Horngren s Financial Managerial Accounting 4th Edition Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura https://testbankdata.com/download/solution-manual-horngrens-financialmanagerial-accounting-4th-edition-tracie-l-nobles-brenda-l-mattison-ella-maematsumura/

More information

NCERT Solutions for Class 11 Accountancy. Financial Accounting Part-2 Chapter 2

NCERT Solutions for Class 11 Accountancy. Financial Accounting Part-2 Chapter 2 NCERT Solutions for Class 11 Accountancy Financial Accounting Part-2 Chapter 2 Financial Statements Short answers : Solutions of Questions on Page Number : 422 Q1 : Why is it necessary to record the adjusting

More information

NCERT Solutions for Class 11 Accountancy Financial Accounting Part-2 Chapter 2

NCERT Solutions for Class 11 Accountancy Financial Accounting Part-2 Chapter 2 NCERT Solutions for Class 11 Accountancy Financial Accounting Part-2 Chapter 2 Financial Statements Class 11 Chapter 2 Financial Statements Exercise Solutions

More information

2. Which of the following is an external user of accounting information? A) Labor unions. B) Finance directors. C) Company officers. D) Managers.

2. Which of the following is an external user of accounting information? A) Labor unions. B) Finance directors. C) Company officers. D) Managers. Name: Date: 1. The study of accounting is not useful for a business career unless your career objective is to become an accountant. A) True B) False 2. Which of the following is an external user of accounting

More information

Current tax liability in four cases

Current tax liability in four cases Question 6.2 Current tax liability in four cases The chief financial officer of Lost Weekend Ltd has asked you to calculate the taxable income and prepare the journal entry for the current tax liability

More information

3. CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS

3. CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS 3. CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS (1) Consolidated Quarterly Balance Sheets December 31, 2013 and March 31, 2013 March 31, 2013 December 31, 2013 Assets Current assets Cash and deposits 93,413

More information

FINANCIAL ACCOUNTING PRINCIPLES (BAT4M) FINAL EXAMINATION

FINANCIAL ACCOUNTING PRINCIPLES (BAT4M) FINAL EXAMINATION Canadian International Matriculation Programme Sunway College FINANCIAL ACCOUNTING PRINCIPLES (BAT4M) FINAL EXAMINATION Date : 5 December 2017 Time Length Lecturer : 8:30 a.m. 10:30 a.m. : 2 hours : Ms

More information

Principles of Accounting II

Principles of Accounting II Principles of Accounting II Lecture 1 Adjusting the Accounts Basic Accounting Equation What the business owns = What the business owes Assets = Liabilities (owed to creditors)+ Owners Equity (residual

More information

ACCOUNTING I. 1. The cash account is used to summarize information about the amount of money the business has available.

ACCOUNTING I. 1. The cash account is used to summarize information about the amount of money the business has available. ACCOUNTING I True/False Indicate whether the sentence or statement is true or false. 1. The cash account is used to summarize information about the amount of money the business has available. 2. The source

More information

Total assets 22,581 21,030 $186,107

Total assets 22,581 21,030 $186,107 Non-Consolidated Balance Sheets As of December 31,2017 and 2016 Thousands of U.S.Dollars Millions of Yen (1US$=\113.00) Assets 2016 2017 2017 Current assets: Cash on hand and in banks 826 1,395 $12,348

More information

Chapter 3 Question Review 1

Chapter 3 Question Review 1 Chapter 3 Question Review 1 Chapter 3 Questions Multiple Choice 1. If services are rendered on account, then a. assets will decrease. b. liabilities will increase. c. stockholders equity will increase.

More information

Chapter 2 Review of the Accounting Process

Chapter 2 Review of the Accounting Process True/False Questions 1. Owners' equity can be expressed as assets minus liabilities. True Learning Objective: 1 Level of Learning: 1 2. Debits increase asset accounts and decrease liability accounts. True

More information

Page 1 of 10 Ehab Abdou ( )

Page 1 of 10 Ehab Abdou ( ) Statement of Financial Position, also referred to as the balance sheet: 1. Reports assets, liabilities, and equity at a specific date. 2. Provides information about resources, obligations to creditors,

More information

B.COM I ACCOUNTING REGULAR. S.Hussain

B.COM I ACCOUNTING REGULAR. S.Hussain The workings under the heading of Additional Working are not required according to the requirement of the examiner. These are only for understanding the solutions. For more help, visit www.a4accounting.net

More information

COMSATS Institute of Information Technology Abbottabad

COMSATS Institute of Information Technology Abbottabad COMSATS Institute of Information Technology Abbottabad Department of Management Sciences Terminal Section A Class: Date: Subject: Accounting Instructor: Zaheer A. Swati Time Allowed: 30 Minutes Max Marks:

More information

Chapter 4: Completing the Accounting Cycle. Learning Objective 2 Prepare financial statements from adjusted account balances.

Chapter 4: Completing the Accounting Cycle. Learning Objective 2 Prepare financial statements from adjusted account balances. 1 Chapter 4 Completing the Accounting Cycle Chapter 4: Completing the Accounting Cycle Learning Objective 2 Prepare financial statements from adjusted account balances. From chapter 3 NetSolutions Adjusted

More information

Fill-in-the-Blank Equations. Exercises

Fill-in-the-Blank Equations. Exercises Chapter 3 The Adjusting Process Study Guide Solutions 1. Net book value Fill-in-the-Blank Equations 2. Depreciation expense 3. Supplies expense 4. Expense Exercises 1. Determine if each of the following

More information

PRINCIPLES OF ACCOUNTING b.com part I

PRINCIPLES OF ACCOUNTING b.com part I PRINCIPLES OF ACCOUNTING b.com part I 2013 PRIVATE (SUPPLEMENTARY) Solved Paper Compiled & Solved by: Sameer Hussain Instructions: (1) Attempt any FIVE questions. (2) All questions carry equal marks. (3)

More information

Chapter 3 Measuring and Evaluating Financial Performance

Chapter 3 Measuring and Evaluating Financial Performance Chapter 3 Measuring and Evaluating Financial Performance Solution Outline for Problem 3.1 As corporations began to take on lives of their own, the owners needed to know how the corporations were performing

More information

Financial Statements for Fiscal 2003 (April 1, 2003 to March 31, 2004) Nippon Steel Chemical Co., Ltd.

Financial Statements for Fiscal 2003 (April 1, 2003 to March 31, 2004) Nippon Steel Chemical Co., Ltd. Financial Statements for Fiscal 2003 (April 1, 2003 to March 31, 2004) Nippon Steel Chemical Co., Ltd. 1 Consolidated Operating Performances 2004 2003 Increase or decrease 2004 from previous term Net sales

More information

Consolidated Balance Sheets

Consolidated Balance Sheets Consolidated Balance Sheets (As of March 31, 2017) ASSETS LIABILITIES Current Assets 1,044,322 Current liabilities 849,143 Cash and deposits 155,763 Notes and accounts payable 414,090 Notes and accounts

More information

Consolidated Balance Sheets

Consolidated Balance Sheets Consolidated Balance Sheets (As of March 31, 2018) ASSETS LIABILITIES Current Assets 1,046,288 Current liabilities 901,018 Cash and deposits 165,526 Notes and accounts payable 457,126 Notes and accounts

More information

CH 22 Textbook Self-Study Questions

CH 22 Textbook Self-Study Questions C H 2 2 P a g e 1 CH 22 Textbook Self-Study Questions 2. Which of the following is accounted for as a change in accounting principle? A. A change in the residual value of plant assets. B. A change from

More information

Chapter # 9. Correction of Errors. Principles of Accounting XI. Sameer Hussain.

Chapter # 9. Correction of Errors. Principles of Accounting XI. Sameer Hussain. Correction of Errors Principles of Accounting XI Chapter contents Correction of errors. Errors where trial balance still balances: o Error of omission. o Error of commission. o Error of principle. o Compensating

More information

Accounting for Business Transactions QUESTIONS

Accounting for Business Transactions QUESTIONS Financial and Managerial Accounting 7th Edition Wild Solutions Manual Full Download: http://testbanklive.com/download/financial-and-managerial-accounting-7th-edition-wild-solutions-manual/ Chapter 2 Accounting

More information

PROBLEM 3-2B. (a) J1 Date Account Titles Ref. Debit Credit May 31 Insurance Expense Prepaid Insurance...

PROBLEM 3-2B. (a) J1 Date Account Titles Ref. Debit Credit May 31 Insurance Expense Prepaid Insurance... PROBLEM 3-2B (a) J1 Date Account Titles Ref. Debit Credit May 31 Insurance Expense... 722 190 Prepaid Insurance... ($2,280 X 1/12) 130 190 31 Supplies Expense... Supplies ($2,200 $)... 631 126 1,450 1,450

More information

Millî Reasürans Türk Anonim Şirketi Unconsolidated Balance Sheet As At 30 September 2018 (Currency: Turkish Lira (TL))

Millî Reasürans Türk Anonim Şirketi Unconsolidated Balance Sheet As At 30 September 2018 (Currency: Turkish Lira (TL)) Unconsolidated Balance Sheet As At ASSETS 1 Audited 31 December 2017 I- Current Assets A- Cash and Cash Equivalents 4.2,14 1.654.893.371 1.223.132.413 1- Cash 4.2,14 58.270 5.842 2- Cheques Received 3-

More information

CS101 Introduction of computing

CS101 Introduction of computing FINAL TERM EXAMINATION MGT101- Financial Accounting (PAPER 1). Question No: 1 (Marks: 1 ) basic accounting principle/concept according to which Business is independent from its owner(s) is known as: Separate

More information

CENTRAL MINNESOTA HABITAT FOR HUMANITY AUDITED FINANCIAL STATEMENTS JUNE 30, 2015

CENTRAL MINNESOTA HABITAT FOR HUMANITY AUDITED FINANCIAL STATEMENTS JUNE 30, 2015 CENTRAL MINNESOTA HABITAT FOR HUMANITY AUDITED FINANCIAL STATEMENTS SCHLENNER WENNER & CO. Certified Public Accountants & Business Consultants TABLE OF CONTENTS Independent Auditors' Report... 1 Statement

More information

PORT EVERGLADES DEPARTMENT of Broward County, Florida Statements of Net Position March 31, 2016 and 2015 (Unaudited) (Dollars in Thousands)

PORT EVERGLADES DEPARTMENT of Broward County, Florida Statements of Net Position March 31, 2016 and 2015 (Unaudited) (Dollars in Thousands) Statements of Net Position March 31, 2016 and 2015 (Unaudited) ASSETS Current Assets Unrestricted assets Cash and cash equivalents $ 17,954 $ 14,339 Investments 223,700 214,935 Accounts receivable, trade

More information

McDonald Golf Enterprises, Inc. d/b/a The Club at Eaglebrooke FINANCIAL STATEMENTS. October 31, 2016

McDonald Golf Enterprises, Inc. d/b/a The Club at Eaglebrooke FINANCIAL STATEMENTS. October 31, 2016 McDonald Golf Enterprises, Inc. d/b/a The Club at Eaglebrooke FINANCIAL STATEMENTS McDonald Golf Enterprises, Inc. d/b/a The Club at Eaglebrooke FINANCIAL STATEMENTS TABLE OF CONTENTS Page Number REPORT

More information

Accounting Basics, Part 1

Accounting Basics, Part 1 Accounting Basics, Part 1 Accrual, Double-Entry Accounting, Debits & Credits, Chart of Accounts, Journals and, Ledger Part 1 What s Here Introduction Business Types Business Organization Professional Advice

More information

Robe Case. Overview. Required: The objectives of this case are to: o Review Writing Journal Entries o Review reading financial financial statements

Robe Case. Overview. Required: The objectives of this case are to: o Review Writing Journal Entries o Review reading financial financial statements Robe Case Overview The objectives of this case are to: o Review Writing Journal Entries o Review reading financial financial statements Required: Complete the three questions on the next page. Barry M

More information

Millî Reasürans Türk Anonim Şirketi Unconsolidated Balance Sheet As At 30 June 2018 (Currency: Turkish Lira (TL))

Millî Reasürans Türk Anonim Şirketi Unconsolidated Balance Sheet As At 30 June 2018 (Currency: Turkish Lira (TL)) Unconsolidated Balance Sheet As At ASSETS. 1 31 December 2017 I- Current Assets A- Cash and Cash Equivalents 4.2,14 1.237.184.185 1.223.132.413 1- Cash 4.2,14 52.698 5.842 2- Cheques Received 3- Banks

More information

QUESTION 2 IAS 1 (CAF5 A15) Following is the summarised trial balance of Eagles Limited (EL) as at 30 June 2015: Debit Rs. in 000

QUESTION 2 IAS 1 (CAF5 A15) Following is the summarised trial balance of Eagles Limited (EL) as at 30 June 2015: Debit Rs. in 000 QUESTION 2 IAS 1 (CAF5 A15) Following is the summarised trial balance of Eagles Limited (EL) as at 30 June 2015: Debit Credit Plant 2,500 Acc. depreciation at 1 July 2014 Equipment 700 Plant 1,000 Stock

More information

Visit Free Slides and Ebooks : CHAPTER 23. Statement of Cash Flows

Visit Free Slides and Ebooks :   CHAPTER 23. Statement of Cash Flows CHAPTER 23 Statement of Cash Flows ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Format, objectives purpose, and source of statement.

More information

Paper N0:15. Solved by Chanda Rehman, Nomi chakwal ABr FINALTERM EXAMINATION. Fall MGT101- Financial Accounting (Session - 4)

Paper N0:15. Solved by Chanda Rehman, Nomi chakwal ABr FINALTERM EXAMINATION. Fall MGT101- Financial Accounting (Session - 4) Paper N0:15 Solved by Chanda Rehman, Nomi chakwal ABr FINALTERM EXAMINATION Fall 2009 MGT101- Financial Accounting (Session - 4) Time: 120 min Marks: 87 Question No: 1 ( Marks: 1 ) - Please choose one

More information

Millî Reasürans Türk Anonim Şirketi Consolidated Balance Sheet As At 30 September 2017 (Currency: Turkish Lira (TL))

Millî Reasürans Türk Anonim Şirketi Consolidated Balance Sheet As At 30 September 2017 (Currency: Turkish Lira (TL)) Consolidated Balance Sheet As At ASSETS Restated Audited 31 December 2016 I- Current Assets A- Cash and Cash Equivalents 14 4.776.447.134 4.342.688.861 1- Cash 14 81.993 52.555 2- Cheques Received 450.000

More information

City of Bingham. Cumulative Problem. For use with McGraw-Hill/Irwin Accounting for Governmental and Nonprofit Entities, 13 th Edition

City of Bingham. Cumulative Problem. For use with McGraw-Hill/Irwin Accounting for Governmental and Nonprofit Entities, 13 th Edition City of Bingham Cumulative Problem For use with McGraw-Hill/Irwin Accounting for Governmental and Nonprofit Entities, 13 th Edition By Earl R. Wilson and Susan C. Kattelus Table of Contents Foreword 1

More information

Financial Results for the Year Ended March 31, 2018

Financial Results for the Year Ended March 31, 2018 Reference translation Financial Results for the Year Ended May 11, 2018 Company Name: Takasago Thermal Engineering Co., Ltd. Stock Exchange Listing: Tokyo 1st section Code Number: 1969 Company URL: https://www.tte-net.com/

More information

CITY OF RICHMOND, VIRGINIA STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2004

CITY OF RICHMOND, VIRGINIA STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2004 EXHIBIT E-1 STATEMENT OF NET ASSETS June 30, 2004 Water Wastewater Other Total Assets Current Assets: Cash and Cash Equivalents (Note 3) $ 31,717,844 $ 5,117,193 $ 35,102,877 $ 99,857 $ 72,037,771 $ 42,342,593

More information

Learning Outcomes. The Basic Accounting Cycle

Learning Outcomes. The Basic Accounting Cycle Chapter 2: Review of the Accounting Process Part 3: Accounting Cycle with Emphasis on Year End Activities Intermediate Accounting 1 Dr. Chula King Learning Outcomes After completing this part, you should

More information

CP:

CP: Adeng Pustikaningsih, M.Si. Dosen Jurusan Pendidikan Akuntansi Fakultas Ekonomi Universitas Negeri Yogyakarta CP: 08 222 180 1695 Email : adengpustikaningsih@uny.ac.id 22-1 22-2 PREVIEW OF CHAPTER 22 22-3

More information

THE TRIAL BALANCE AND THE CORRECTION OF ERRORS

THE TRIAL BALANCE AND THE CORRECTION OF ERRORS CHAPTER 22 THE TRIAL BALANCE AND THE CORRECTION OF ERRORS Question 1 Error Type of error 1 An invoice received from a supplier for $657 was recorded in the purchases day book as being for $567 Error of

More information

Fin-621 Final term Solved Papers by Fahad Yusha Cell: and

Fin-621 Final term Solved Papers by Fahad Yusha   Cell: and FINALTERM EXAMINATION Spring 2010 FIN621 - Financial Statement Analysis Student Info StudentID: Time: 90 min Marks: 69 Center: ExamDate: Tue, Aug 10, 2010 Question No: 1 After recording the transactions

More information

ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ DETAILED BALANCE SHEET. ASSETS I- Current Assets

ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ DETAILED BALANCE SHEET. ASSETS I- Current Assets ASSETS I- Current Assets A- Cash and Cash Equivalents 14 3.775.262.937 3.504.676.959 1- Cash 14 54.840 62.857 2- Cheques Received 3- Banks 14 3.388.494.332 3.105.334.647 4- Cheques Given and Payment Orders

More information

ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ DETAILED BALANCE SHEET ASSETS

ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ DETAILED BALANCE SHEET ASSETS ASSETS I- Current Assets A- Cash and Cash Equivalents 14 3.815.809.477 3.504.676.959 1- Cash 14 45.563 62.857 2- Cheques Received - - 3- Banks 14 3.402.899.507 3.105.334.647 4- Cheques Given and Payment

More information

Chapter 4. The Accounting Cycle Adjusting Entries Closing Process Net Profit Margin Ratio

Chapter 4. The Accounting Cycle Adjusting Entries Closing Process Net Profit Margin Ratio Chapter 4 The Accounting Cycle Adjusting Entries Closing Process Net Profit Margin Ratio The Accounting Cycle Accounting cycle process Records individual transactions Produces the four basic financial

More information

Consolidated Balance Sheet Thousands of yen

Consolidated Balance Sheet Thousands of yen Consolidated Balance Sheet (April 30, 2014) (April 30, 2015) Assets Current assets Cash and deposits 2,283,611 3,404,702 Notes and accounts receivable - trade 8,159,645 9,222,242 Electronically recorded

More information

Consolidated Balance Sheet Thousands of yen

Consolidated Balance Sheet Thousands of yen Consolidated Balance Sheet (April 30, 2015) (April 30, 2016) Assets Current assets Cash and deposits 3,404,702 4,316,071 Notes and accounts receivable trade 9,222,242 8,400,095 Electronically recorded

More information

Not For Sale CHECK FIGURES. Chapter 1. Chapter 3. Chapter 2

Not For Sale CHECK FIGURES. Chapter 1. Chapter 3. Chapter 2 CHECK FIGURES 796 Check figures are given for selected problems here. For the complete Check Figures for all applicable Cornerstone Exercises, Exercises, Problems, and Cases, please visit the companion

More information

Exhibit D-1 Page1 PACIFIC GAS AND ELECTRIC COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Exhibit D-1 Page1 PACIFIC GAS AND ELECTRIC COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME EXHIBIT D PACIFIC GAS AND ELECTRIC COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME Exhibit D-1 Page1 (Unaudited) Three Months Ended March 31, (in millions) 2010 2009 Operating Revenues Electric $ 2,510

More information

PROFESSIONAL DISC GOLF ASSOCIATION, INC. FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016

PROFESSIONAL DISC GOLF ASSOCIATION, INC. FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016 FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016 TABLE OF CONTENTS Independent Auditor's Report 1-2 Financial Statements: Statements of Financial Position...... 3 Statements of Activities 4 Statements of

More information

FAQ: Statement of Cash Flows

FAQ: Statement of Cash Flows Question 1: What sources are used when the statement of cash flows is being prepared, and what information does each source provide? Answer 1: The statement of cash flows is prepared differently from the

More information

Practice Multiple Choice Questions

Practice Multiple Choice Questions FINAL EXAM REVIEW The comprehensive final exam consists of 50 questions, approximately 2/3 of which are from chapters 10 through 12. The remaining questions are from chapters 1 through 9. The questions

More information

SmallBizU WORKSHEET 1: REQUIRED START-UP FUNDS. Online elearning Classroom. Item Required Amount ($) Fixed Assets. 1 -Buildings $ 2 -Land $

SmallBizU WORKSHEET 1: REQUIRED START-UP FUNDS. Online elearning Classroom. Item Required Amount ($) Fixed Assets. 1 -Buildings $ 2 -Land $ WORKSHEET 1: REQUIRED START-UP FUNDS Item Required Amount () Fixed Assets 1 -Buildings 2 -Land 3 -Initial Inventory 4 -Equipment 5 -Furniture and Fixtures 6 -Vehicles 7 Total Fixed Assets Working Capital

More information

Date of Homework assigned: 7 Apr 2014 Due date: 16 Apr 2014 Exercise book: Book 1

Date of Homework assigned: 7 Apr 2014 Due date: 16 Apr 2014 Exercise book: Book 1 2013-2014 / F.4 BAFS / HA11 / P.1 TWGHs Wong Fut Nam College Form 4 Business, Accounting and Financial Studies Homework Assignment 11 FA Ch1-3 Preparation of Financial Statements for Sole Proprietorships

More information

ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ DETAILED BALANCE SHEET (TRY) ASSETS I- Current Assets

ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ DETAILED BALANCE SHEET (TRY) ASSETS I- Current Assets ASSETS I- Current Assets A- Cash and Cash Equivalents 14 3.066.806.799 3.217.463.827 1- Cash 14 30.243 35.109 2- Cheques Received 3- Banks 14 2.669.454.374 2.795.907.111 4- Cheques Given and Payment Orders

More information

Balance Sheet - Form of Statement

Balance Sheet - Form of Statement Annex K ( SRC Rule 68 ) Balance Sheet - Form of Statement If applicable, and except as otherwise permitted by the Commission, the following line items and certain additional disclosures should appear on

More information