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Amanda [17]
3 years ago
5

The reported net incomes for the first 2 years of Sarasota Products, Inc., were as follows: 2020, $155,500; 2021, $188,100. Earl

y in 2022, the following errors were discovered.
1. Depreciation of equipment for 2020 was overstated $15,900.
2. Depreciation of equipment for 2021 was understated $37,500.
3. December 31, 2020, inventory was understated $48,400.
4. December 31, 2021, inventory was overstated $15,800.
Prepare the correcting entry necessary when these errors are discovered. Assume that the books are closed.
Business
1 answer:
Phoenix [80]3 years ago
5 0

Answer:

Dr retained earnings($21,600+$15,800) $37,400.00

Cr  accumulated depreciation                                         $21,600

Cr inventory                                                                       $15,800

Explanation:

The errors that require adjustment are the overstatement and understatement of depreciation expense as well as the December 2021 overstatement of inventory.

The understatement of inventory in 2020 would have self-corrected itself in 2021 since closing inventory in 2020 deducted from costs of goods available  for sale would be introduced as opening inventory in 2021.

net effect of depreciation=understatement -overstatement=$37,500-$15,900=$21,600.00

hence retained earnings would reduce by $21,600.00

for the overstatement of inventory,retained earnings would reduce by $15,800

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The nature of the tax system means that there is usually a trade-off between ___ and ___.
IgorC [24]

Answer:

<u>equity and efficiency</u>

Explanation:

Under the tax system there is no tax on losses. And also the losses can be carried forward and set off to profits in future.

When profits are earned the taxes are paid. After that the remaining profit is either distributed to equity or retained for future purposes.

The more efficiently the company works, higher will be the profit and higher will be the taxes.

As profit is for equity, and from that share the amount is given to tax authorities, which is some part of income, share of equity to tax.

Though it does not provide for right in company, but it is legal to pay the tax.

That is the price you pay for increasing or decreasing efficiency, in the form of income available for equity.

5 0
3 years ago
Phoenix Agency leases office space for $7,700 per month. On January 3, Phoenix incurs $105,600 to improve the leased office spac
nadezda [96]

Answer:

$13,200 per year

Explanation:

Amount incurred to improve the office space = $

Improvement expected to yield benefit = 10 years

Remaining life on it's lease = 8 years

Since the office space is not going to remain with Phoenix after the lease period, it means that the improvement expenses will be expensed over the remaining lease period I.e 8 years.

Therefore, the amount of expense that should be recorded the first year related to improvements can be calculated as;

= Amount incurred to improve the office space ÷ remaining life on its lease

= $105,600 ÷ 8

= $13,200 per year

7 0
3 years ago
Effective managers their dominant decision style to avoid making mistakes. for each example, select the decision style that most
Vaselesa [24]

Simply put, Decision making is defined as the process involved in making a decision. It involves comparing alternatives and finding a solution to a problem.

The four styles of decision making are directive, analytical, conceptual and behavioral. Each style is a different method of weighing alternatives and examining solutions.

Kyle prefers to base decisions on lots of data, both objective data from information systems and qualitative data from people - Analytical decision style

Bill prefers simple, clear-cut solutions to problems. - Directive decision style.

Josie likes to talk to people one on one to find out how the decision will affect them - Behavioural decision style.

4 0
3 years ago
Sky Communications (SKY) usually sells a cell phone for $448 plus 12 months of cellular service for $672. SKY has a special, tim
jeka94

Explanation:

The Journal Entry from July 1 and July 31 is shown below:-

1. Cash Dr,                                             $560

            To Deferred revenue                                  $560

(Being cash is received)

2. Deferred revenue                             $336

            To Sales revenue                                         $336

(Being 12 months sales service is recorded)

3. Cost of goods sold                            $280

            To Inventory                                                 $280

(Being cost of goods sold is recorded)

4. Deferred revenue ($336 ÷ 12)            $28

            To Service revenue                                      $28

(Being Deferred service revenue is recorded)

Working Note:-

Cellular service revenue = offer price ÷ total cost of phone and service × cellular service

= (($560 ÷ ($448 + $672)) × $672

= $336

3 0
3 years ago
Use the words innovative and ambitious in one sentence
Ilia_Sergeevich [38]

Answer:

As a team, and as company,  we try to be forward thinking, and ambitious in our approach with the technology , and innovative with new products to market to the consumer.

Explanation:

Able to use both words in a solid sentence structure.

8 0
3 years ago
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