Question

You have been assigned to examine the financial statements of PC corp. for the year ended...

You have been assigned to examine the financial statements of PC corp. for the year ended December 31, 2019, as prepared following IFRS. You discover the following situations:

  1. Physical inventory count on Dec31, 2018, improperly excluded merchandise costing $13,000 that had been temporarily stored in a public warehouse. PC uses periodic inventory system
  2. Physical inventory count on Dec31,2019, improperly included merchandise with a cost of $26,000 that had been recorded as a sale on Dec27, 2019, and was being held for the customer to pick up on Jan 4,2020
  3. Depreciation of $6,700 for 2018 on delivery vehicles was not recorded
  4. A collection of $4,600 on account from customer received on Dec 31,2019, was not recorded until Jan 2, 2020
  5. A large piece of equipment was purchased on Jan 1, 2019 for $20,500 and was charged in error to repairs expense. The equipment estimated useful life 8 years and no residual value. PC uses straight-line depreciation method for this type of equipment.
  6. On Dec 31, 2018 accrued wages of $1,500 were not recognized and not recorded
  7. A 3 years insurance premium paid on July 1,2018 for policy expires on June 30,2021, amount of $12,000 was charged to insurance expense
  8. The Accountant recorded a purchase of supplies for $9,000 in 2019 that applied to 2020.
  9. At the beginning of 2017, the company purchased equipment for $225,000(residual value $22,500) and had useful life 6 years. The accountant used straight line amortization, but failed to deduct the residual value in calculation the depreciation base for the past and current years.
  10. A cheque for $44,000 was paid in January 1, 2019 to cover the rent for 2019 and 2020; the entire amount was debited to rental expense.

Instructions:

Prepare the required Journal entries (if any) to correct PC accounts, assuming each transaction is independent and assume 2019 books are not closed.

Homework Answers

Answer #1

NO ENTRY FOR LAST TO ENTRY REQUIRED

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
URGENT! You are engaged to audit Tesla Corporation for the year ended December 31, 2019. Inventory...
URGENT! You are engaged to audit Tesla Corporation for the year ended December 31, 2019. Inventory was counted on December 30 and only merchandise shipped by Tesla Corporation to customers up to and including December 30, 2019, has been eliminated from inventory. The inventory as determined by physical inventory count has been recorded on the books by the company’s controller. No perpetual inventory records are maintained. All sales are made on an FOB–shipping point basis. You are to assume that...
You have been assigned to examine the financial statement of SPD Company for the year 2015....
You have been assigned to examine the financial statement of SPD Company for the year 2015. You discovered the following situations :        a.    In October, 2013 the company sold goods $4,600 on credit. This revenue was mistakenly recorded as debit cash and credit sales $6,400 (All cash received in 2014).         b. On Dec 31, 2014 the company forgot to adjust accrued interest $1,200 from notes payable. (Interest Expense was recorded when it paid during 2015). Required :    (Ignore...
2) Equipment was purchased at the beginning of 2019 for $900,000. At the time of its...
2) Equipment was purchased at the beginning of 2019 for $900,000. At the time of its purchase, the equipment was estimated to have a useful life of five years and a salvage value of $100,000. The equipment was depreciated using the straight-line method of depreciation through 2021. At the beginning of 2022, the estimate of useful life was revised to a total life of seven years and the expected salvage value was changed to $42,500. The amount to be recorded...
Recording a Change in Estimate, an Error Correction, and a Change in Accounting Principle On December...
Recording a Change in Estimate, an Error Correction, and a Change in Accounting Principle On December 31, 2020, Alexa Company is preparing adjusting entries for its annual year-end. The following situations confront the company. Equipment #101 with a cost of $23,100 was purchased on January 1, 2018. It is being depreciated on a straight-line basis over an estimated useful life of 15 years with no residual value. At December 31, 2020, it has been determined that the total useful life...
The first audit of the books of Wildhorse Company was made for the year ended December...
The first audit of the books of Wildhorse Company was made for the year ended December 31, 2021. In examining the books, the auditor found that certain items had been overlooked or incorrectly handled in the last 3 years. These items are: 1. At the beginning of 2019, the company purchased a machine for $516,000 (salvage value of $51,600) that had a useful life of 6 years. The bookkeeper used straight-line depreciation but failed to deduct the salvage value in...
MCQ Cheyenne Ltd's December 31 year-end financial statements contained the following errors December 31, 2019 December...
MCQ Cheyenne Ltd's December 31 year-end financial statements contained the following errors December 31, 2019 December 31, 2020 Ending inventory 1500 understated 2200 overstated Depreciation expense 400 understated An insurance premium of $3600 was prepaid in 2019 covering the calendar years, 2019, 2020, and 2021. This had been debited to insurance expense. In addition on December 31, 2020, fully depreciated machinery was sold for $1900 cash but the sale was not recorded until 2021. There were no other errors during...
At 30 June 2015, the financial statements of McMaster Ltd showed a building with a cost...
At 30 June 2015, the financial statements of McMaster Ltd showed a building with a cost (net of GST) of $324,000 and accumulated depreciation of $164,000. The business uses the straight-line method to depreciate the building. When acquired, the building's useful life was estimated at 30 years and its residual value at $65,000. On 1 January 2016, McMaster Ltd made structural improvements to the building costing $102,000 (net of GST). Although the capacity of the building was unchanged, it is...
June 30, 2020    A building that Big Company had purchased on January 1, 2016, for $...
June 30, 2020    A building that Big Company had purchased on January 1, 2016, for $ 10,000 was exchanged for another building owned by Other Company. Big Company exchanged its building and $1,000 cash for Other Company’s building. Big’s building had a fair value of $ 9,500 at the time of the exchange. Straight-line depreciation on the building with a 40-year useful life and no R.V. has been properly charged from Jan. 1, 2016 through Dec. 31, 2019. Both parcels...
Hanson Company purchased a piece of equipment for $1,730,000 and placed it in operation on January...
Hanson Company purchased a piece of equipment for $1,730,000 and placed it in operation on January 1, 2016. Depreciation was recorded for 2016, 2017, and 2018 using the straight-line method, a 10-year life, and an expected residual value of $63,000. Based on the Hanson Company’s usage of the equipment through 2018, they believe that the useful life of the equipment will be longer than they had originally estimated. They have revised the estimated life of the equipment to be a...
Lessor leasing company agrees to lease equipment to Lessee corp. on Jan 1, 2019, both Lessor...
Lessor leasing company agrees to lease equipment to Lessee corp. on Jan 1, 2019, both Lessor and Lessee follows IFRS. The following information relates to the lease agreement: 1- the lease term is 7 years, no renewal, 2- Lessor acquired the equipment this day Jan 1, 2019 for $560,000 cash, the useful life 10 years 3- at the end of the term the equipment to be returned to the lessor with guaranteed residual value of $40,000 4- the lease agreement...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT