Question

You are reviewing your company's preliminary summary financial statements for the year which are as follows:...

You are reviewing your company's preliminary summary financial statements for the year which are as follows:

Assets $1,500,000

Liabilities $400,000

Equity $1,100,000

Net Income $200,000

After talking with the accounting department, you discover that they have not written off $50,000 worth of inventory which has become unsalable. How will the correction of this error affect the financial statements?

If you discover that they have written $50,000 that should not have been written off, how will the correction of this error affect the financial statements?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are reviewing the most recent three years financial statements of a potential partner and notice...
You are reviewing the most recent three years financial statements of a potential partner and notice that their loan balances and their interest expense is declining slowing over the three-year period. They have told you that they have had the same loans outstanding over the three-year period (no loans paid off and no new loans signed). What is the likely explanation for the decrease in loan balances and interest expense? Their loans only require interest payments until maturity. They have...
You are internal auditor for Shannon Supplies, Inc., and are reviewing the company’s preliminary financial statements....
You are internal auditor for Shannon Supplies, Inc., and are reviewing the company’s preliminary financial statements. The statements, prepared after making the adjusting entries, but before closing entries for the year ended December 31, 2018, are as follows: SHANNON SUPPLIES, INC. Balance Sheet December 31, 2018 ($ in 000s) Assets Cash $ 2,450 Investments 300 Accounts receivable, net 860 Inventory 1,110 Property, plant, and equipment 1,290 Less: Accumulated depreciation (510 ) Total assets $ 5,500 Liabilities and Shareholders’ Equity Accounts...
You are reviewing the financial statements for Jones Electric Company for 2019 and have found a...
You are reviewing the financial statements for Jones Electric Company for 2019 and have found a series of errors. Account  Balance Supplies $36,000 Prepaid insurance $18,000 Unearned revenue $50,000 Accrued liabilities $12,000 Office expenses $30,000 Property, plant and equipment $72,000 Accumulated depreciation ($10,400) Retained earnings, 1/1/19 $150,000 Prepare correcting journal entries (a) if the books are open and (b) if the books are closed. c. Assume that Jones Electric is only providing an income statement and balance sheet for the current...
Evaluate the financial information of Nike (NKE NYSE) the company's annual report. The body of the...
Evaluate the financial information of Nike (NKE NYSE) the company's annual report. The body of the paper should include the following items: Why you selected this particular company? Review the financial statements, including footnote disclosures, for the current and prior years and discuss the financial position of the company and any significant events that have occurred and will be happening soon that have the ability to affect company performance. Discuss the company’s position in regard to the current stock market....
The financial statements of Bill Gates Manufacturing are shown below. Income Statement 2020 Sales $ 9,300,000...
The financial statements of Bill Gates Manufacturing are shown below. Income Statement 2020 Sales $ 9,300,000 Cost of Goods Sold 5,750,000 Depreciation Expense 550,000 Gross Profit $ 3,000,000 Selling and Administrative Expenses 2,200,000 EBIT $ 800,000 Interest Expense 200,000 Income before Tax $ 600,000 Taxes 375,000 Net Income $ 225,000 / Bill Gates Manufacturing Comparative Balance Sheets 2020 2019 Cash $ 50,000 $ 40,000 Accounts Receivable 570,000 600,000 Inventory 530,000 460,000 Total Current Assets $ 1,150,000 $ 1,100,000 Fixed Assets...
Chi and Daniella are your clients and you are assessing their current financial situation and how...
Chi and Daniella are your clients and you are assessing their current financial situation and how it impacts their insurance needs. Chi and Daniella are married and they have a mortgage on their home and a joint credit card with an outstanding balance. In addition, Chi has a car loan. Should Chi pass away, which of the following is a correct statement which describes the probable treatment of their debts? a) the mortgage will be automatically extended to Daniella as...
Using the financial statements for the fiscal year 2015 you will analyze the performance of each...
Using the financial statements for the fiscal year 2015 you will analyze the performance of each toy company individually and also compare the performance of the two companies against each other. You will perform your analyses by answering the 13 questions on page 2. Answers to the 13 questions must be provided on pages 3 and 4 and submitted by the due date. Show all calculations for your answers on an attachment to your answer sheets. No partial credit can...
You are preparing the December 31, Year 2, financial statements. Required a. (5 marks) Your analysis...
You are preparing the December 31, Year 2, financial statements. Required a. Your analysis of accounts receivable indicates the following for Year 2: Accounts receivable – January $ 175,000 Allowance for doubtful accounts – January 1 17,500 Credit sales during the year 600,000 Cash collections during the year 575,000 Your analysis of the aged accounts receivable at the year indicates: 1. A key customer, Alpha, went bankrupt during the year, and there will be no further collections on this account...
After an auditing firm signed off on Acme’s financial statements, Acme’s CFO and thehead of its...
After an auditing firm signed off on Acme’s financial statements, Acme’s CFO and thehead of its sales department were indicted for falsely reporting sales and earnings over a three-year period by creating phony invoices on non-existent sales. Acme’s CEO and chairman professed ignorance of the scheme and fired the CFO and head of sales once the scheme became known. Do you believe these three groups knew of the fraud? Acme’s CEO _________________ Acme’s Board of Directors ______________ External auditors __________________________...
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: 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 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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT