question archive You were assigned to do the audit of Karen Company financial statements and had observe the following: Purchase of merchandise on account on December 24, 2017 amounting to Php 60,000 was not recorded until it was paid in January 2018
You were assigned to do the audit of Karen Company financial statements and had observe the following: Purchase of merchandise on account on December 24, 2017 amounting to Php 60,000 was not recorded until it was paid in January 2018
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You were assigned to do the audit of Karen Company financial statements and had observe the following:
- Purchase of merchandise on account on December 24, 2017 amounting to Php 60,000 was not recorded until it was paid in January 2018. The merchandise was properly included in the 2017 ending inventory
- Sale of merchandise on account on December 30, 2017 amounting to Php 80,000 was not recorded until it was collected in January 2018. The merchandise was properly excluded in the 2017 ending inventory
- On December 31, 2017, the ending inventory was overstated by Php 20,000.
The following data were extracted from the financial statements of Karen Company:
2017
Net Income - Php 200,000
Working Capital - Php 180,000
Retained Earnings, end of year - Php 200,000
2018
Net Income - 160,000
Working Capital - Php 260,000
Retained Earnings, end of year - Php 360,000
Required: Compute for the following:
- Net Income , 2017
- Working Capital , 2017
- Retained Earnings, 2017
- Net Income, 2018
- Working Capital, 2018
- Retained Earnings, 2018
- Prepare the adjusting entries assuming the errors were discovered in (a) 2017; (b) 2018 and (c) 2019
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