Accounting Error Correction
Answer Cases 4 and 5 using the format used in the cases below.
A B C E F G H J K L N O P Q R T U Case 1- A one-year insurance for P120,000 paid on October 1, 2018 was initially recorded as an expense. No year-end adjustment was made. Case 2-A 3-month rent for P45,000 was collected in advance from a lessee on December 1, 2018. The rent was initially recorded as rent revenue, 2018 2019 2020 and no year-end adjustment was made. EM Insurance Expense 120,000 Case 3- Utilities for December 2018 totaling to P600,000 was paid in January 2019. The expense was paid upon payment. Cast 120,000 Case 4- A one-year, 12%%, P100,000 promissory note was received on April 1, 2018. The whole interest was recorded as an income upon collection on March 31, 2019. Case 5- The annual depreciation of P1,000,000 was erroneously recorded as P100,000 in 2018. SB Insurance Expense 120,000 Insurance Expense 90,000 Cash 120,000 Prepaid Insurance 90,000 Requirements: 1. Complete the table below by determining the effect on the given by writing (U) for understated, (O] for overstated, and (X) for unaffected, Prepaid Insurance 90,000 for each case above. Insurance Expense 90,000 2018 2019 2020 CE Prepaid Insurance 90,000 Insurance Expen 90.000 No Entry a. Net income Insurance Expense 90,000 Retained Earnings 90.000 b. Retained earnings, if the books are still open C. Retained earnings, if the books are already closed 2. Provide the correcting entry if the error was discovered in 2018, and a. The books are still open b. The books are already closed 3. Provide the correcting entry if the error was discovered in 2019 a. The books are still open b. The books are already closed 4. Provide the correcting entry if the error was discovered in 2020 a. The books are still open b. The books are already closed O 2018 2019 2020 Retained earnings, beg 0 bj RE. beg X Net Income [Loss) XXX[XXX) Retained earnings, end () RE, end Case 1 Case 2 Case 3 Case 4 Case 5 +A B C E F G H J K L M N O P Q S Case 1 -A one-year insurance for P120,000 paid on October 1, 2018 was initially recorded as an expense. No year-end adjustment was made. Case 2-A 3-month rent for P45,000 was collected in advance from a lessee on December 1, 2018. The rent was initially recorded as rent revenue, 2018 2019 and no year-end adjustment was made. EM Cash 45,000 Case 3- Utilities for December 2018 totalling to P600,000 was paid in January 2019. The expense was paid upon payment. Rent Income 45,000 Case 4- A one-year, 12%, P100,000 promissory note was received on April 1, 2018. The whole interest was recorded as an income upon collection on March 31, 2019. SB Cash 45,000 Unearned Rent Inc 30,000 Case 5- The annual depreciation of P1,000,000 was erroneously recorded as P100,000 in 2018. Rent Income 45,000 Rent Income 30,000 Requirements: Rent Income 30,000 1. Complete the table below by determining the effect on the given by writing (U) for understated, (O) for overstated, and (X) for unaffected, Unearned Rent Inc 30,000 for each case above. 2019 CE Rent Income 30,000 2018 2020 Retained Earnings 30,000 Unearned Rent Inc 30,000 Rent Income 30,000 a. Net income b. Retained earnings, if the books are still open C. Retained earnings, if the books are already closed 2. Provide the correcting entry if the error was discovered in 2018, and a. The books are still open b. The books are already closed Provide the correcting entry if the error was discovered in 2019 a. The books are still open b. The books are already closed 4. Provide the correcting entry if the error was discovered in 2020 a. The books are still open b. The books are already closed 2018 2019 2020 O U X bj RE, beg X 0 o) RE, end Case 1 Case 2 Case 3 Case 4 Case 5 + 1A B C E F G H J K L M N O P Q S T U Case 1- A one-year insurance for P120,000 paid on October 1, 2018 was initially recorded as an expense. No year-end adjustment was made. 2 Case 2-A 3-month rent for P45,000 was collected in advance from a lessee on December 1, 2018. The rent was initially recorded as rent revenue, 2018 2019 2020 and no year-end adjustment was made. EM No Entry Utilities Expense 600,000 Case 3- Utilities for December 2018 totalling to P600,000 was paid in January 2019. The expense was paid upon payment. Cash 600,000 Case 4- A one-year, 12%, P100,000 promissory note was received on April 1, 2018. The whole interest was recorded as an income upon collection on March 31, 2019. SB Utilities Expense 600,000 Utilities Payable 600,000 Utilities Payable 600,000 Cast 500,000 Case 5- The annual depreciation of P1,000,000 was erroneously recorded as P100,000 in 2018. CE Utilities Expense 600,000 Retained Earnings 600,000 Requirements: Utilities Payable 600,000 Utilities Expense 600,000 Complete the table below by determining the effect on the given by writing (U] for understated, (O) for overstated, and (X] for unaffected, for each case above. 14 2018 2019 2020 a. Net income b. Retained earnings, if the books are still open c. Retained earnings, if the books are already closed 20 2. Provide the correcting entry if the error was discovered in 2018, and a. The books are still open b. The books are already closed 3. Provide the correcting entry if the error was discovered in 2019 a. The books are still open b. The books are already closed 4. Provide the correcting entry if the error was discovered in 2020 a. The books are still open b. The books are already closed 2018 2019 2020 30 bj RE, beg. 31 @) RE, end OE 32 Case 1 Case 2 Case 3 Case 4 Case 5 +
