Problem Tests

Try answering the questions I am posting. Click “REPLY” on the problem you want to answer para alam ko kung anong problem yung sinasagot nyo. Ididiscuss ko din ito sa Lectures.

Thanks!!

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  1. March 4, 2011 at 12:09 am

    Problem #1
    CORRECTION OF ERRORS

    Asturias Corp. had the following Net Income for years 2010 to 2012:

    2010: 36,000
    2011: 45,000
    2012: 90,000

    Gross profit rate: 20% of Sales

    Upon the audit of Asturias Corp, you found out about the following:
    1. An equipment worth 75,000 with a life of 10 years was not depreciated since it was bought in July 2010.
    2. At the end of 2010, inventory worth 2,000 was not included in the count.
    3. Rent for parking space worth 11,000 good for 5 years was paid on 2010. The payment was recognized as prepaid that year and expensed fully on 2011.
    4. On 2012 A customer paid 60,000 with an agreement that Asturias Corp. will provide services for that customer for 4 years. Asturias recognized the payment as income on the year it was collected
    5. Materials sold in 2010 with invoice price of 6,000 was recorded when it was billed on Jan. 6, 2011. These materials were included in the count before they were delivered to the customer in the afternoon of Dec. 31, 2010.
    6. An equipment bought in July 2004 for 15,000 has a life of 6 years. Up to the present, Asturias has kept depreciating the said equipment using the straight line method.
    7. Prepaid Expense worth 8,000 was not recognized in 2011. Expense method was used in the original entry.
    8. Unearned Revenue worth 9,000 was not recognized in 2010. Revenue method was used in the original entry.
    9. Accrued Expense worth 7,000 was not recognized in 2010
    10. Accrued Revenue worth 5,000 was not recognized in 2011
    11. A Bad Debt worth 2,000 written off in 2012 was charged to Bad Debts Expense.
    12. Materials sold in 2011 was recorded when it was billed on Jan. 2, 2012. The inventory costing $8,000 was delivered to the customer before the count on December 31, 2011.
    13. Proceeds from the sale of shares of stocks issued issued by Asturias Corp. on 2011 worth $7,000 was recorded as Sales.
    14. A sale on Dec. 31 2011 with an invoice price of $15,000 was recorded when it was billed on that same day. The goods were delivered to the customer after the inventory count.
    15. An equipment bought in 2007 worth $7,000 with a life of 6 years has been depreciated using the straight line method. However, it’s salvage value of $1,800 was not taken into consideration when they are recording the depreciation for the said equipment.

    Compute for the Correct Net Income for the years 2010, 2011, and 2012.

    • March 31, 2011 at 7:13 pm

      ok, eto ang answers:

      CORRECT NET INCOME:
      2010 = 18,800
      2011 = 65,900
      2012 = 29,100

      try solving the problem.

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