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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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OPTION C i.e 11%

Option A i.e 30.55 year

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Capital = EMI \times PVIFA

capital = EMI \times \frac{(1+r))^n -1}{r (1+r)^n}

from the data given in question we can calculate the value of r

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option C

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Total\ saving  =  cash flow \times FVIFA

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from the data given we can evealueate the value of n

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4 0
3 years ago
Zortek Corp. budgets production of 380 units in January and 270 units in February. Each finished unit requires four pounds of ra
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Answer:

Instructions are listed below

Explanation:

Giving the following information:

Zortek Corp. budgets production of 380 units in January and 270 units in February. Each finished unit requires four pounds of raw material Z, which costs $3 per pound. Each month’s ending inventory of raw materials should be 50% of the following month’s budgeted production. The January 1 raw materials inventory has 190 pounds of Z.

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Production Febreaury= (270*4pounds)/2= 540 pounds

Initial inventory= 190 pounds (-)

Purchase= 1870 pounds

3 0
3 years ago
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