Question : 179. On December 31, 2012, a company forgot to record $7,000 : 1256807

 

179. On December 31, 2012, a company forgot to record $7,000 of depreciation on office equipment.  What would be the effect on the assets, net income, and equity when it comes to the 2012financial statements?

 

 

180. Given the table below, indicate the impact of the following errors made during the adjusting entry process. Use a “+” followed by the amount for overstatements, a “-” followed by the amount for understatements and a “0” for no effect. The first one is done as an example.

Ex. Failed to recognize that $600 of unearned revenues, previously recorded as liabilities; had been earned by year-end.

1.  Failed to accrue salaries expense of $1,200.

2.  Forgot to record $2,700 of depreciation on office equipment.

3.  Failed to accrue $300 of interest on a note receivable.

 

 

Error

Revenues

Expenses

Assets

Liabilites

Equity

Ex.

-$600

0

0

$600

-$600

1.

 

 

 

 

 

2.

 

 

 

 

 

3.

 

 

 

 

 

 

 

 

181. A company issued financial statements for the year ended December 31 but failed to include the following adjusting entries:

A. Accrued service fees earned of $2,200.

B. Depreciation expense of $8,000.

C. Portion of office supplies (an asset) used, $3,100.

D. Accrued salaries of $5,200.

E. Revenues of $7,200, originally recorded as unearned, have been earned by the end of the year.

Determine the correct amounts for the December 31 financial statements by completing the following table:

 

 

 

Assets

Liabilities

Equity

Net Income

Reported amounts

$350,000

$200,000

$150,000

$70,000

Add (subtract) to correct for item

 

 

 

 

A

 

 

 

 

B

 

 

 

 

C

 

 

 

 

D

 

 

 

 

E

 

 

 

 

Corrected amounts

$

$

$

$

 

 

 

182. Using the following table indicate the impact of the following errors made during the adjusting entry process. Use a “+” for overstatements, a “-” for understatements and a “0” for no effect. The first one is provided as an example:

 

 

Error

Revenues

Expenses

Assets

Liabilities

Equity

Ex.

Did not record depreciation for this period

0

–

+

0

+

1.

Did not record unpaid utility bill

 

 

 

 

 

2.

Did not adjust unearned revenue account for revenue earned this period.

 

 

 

 

 

3.

Did not adjust office supplies for supplies used this period.

 

 

 

 

 

4.

Did not accrue employees wages for this period.

 

 

 

 

 

5.

Recorded rent expense with a debit to salary expense and a credit to rent payable.

 

 

 

 

 

 

 

183. Reebok’s net income was $180,000; its total assets were $1,050,000; and its net sales were $3,500,000. Calculate the company’s profit margin ratio.