Accounting help please!
In May 20X5, the newly appointed controller of Butch Baking Corporation conducted a thorough review of past accounting, particularly of transactions that exceeded the company's normal level of materiality. As a result of his review, he instructed the company's chief accountant to correct two errors: a. In 20X2, the company made extensive improvements to the baking process and installed a substantial amount of new equipment. The entire cost of the process improvements and equipment was accidentally charged to income as restructuring expense in 20X2. However, the equipment should have been capitalized and added to the factory equipment account. The cost of the equipment was $1,600,000. Butch depreciates its factory equipment on the straight-line basis over 10 years. A full year's depreciation is charged in the year that equipment is acquired. b. A year-end cut-off error occurred in 20X3. A large shipment of nonperishable supplies arrived from China on the last day of 20X3 and had been left in the shipping containers outside the main plant. As a result, the supplies were recorded as received in 20X4 and had not been included in the year-end 20X3 inventory count. The account payable also had not been recorded in 20X3. The supplies cost $104,000. Like most companies, Butch Baking presents a five-year financial summary in its annual report. The 20X4 summary contained the following information (in thousands of dollars, except EPS): Gross revenue Net income Total assets Total liabilities Net assets Earnings per share* 20X0 $ 14,400 1,900 136,000 48,600 87,400 $ 19.00 20x1 $ 15,700 2,060 152,000 63,900 87,400 $ 20.60 20x2 $ 16,900 820 1 42,760 67,520 73,300 $ 8.20 20x3 $ 16,600 2,230 142,000 66,000 73,300 $ 22.30 2 0X4 $ 15,300 1,780 129,000 61,000 74,800 $ 17.80 *100,000 shares outstanding 2. Revise the financial summary. (Enter answer in thousands, not in whole Canadian dollars. Round EPS answers to 1 decimal place.) $ 20x 14,400 1,900 2 0x1 $ 15,700 2,060 20x2 $ 16,900 820 $ 20x3 16,600 2 ,230 $ 20x4 15,300 1,780 136,000 152,000 142,760 142,000 129,000 Gross revenue Net income Adjusted net income Total assets Adjusted total assets Total liabilities Adjusted total liabilities Net assets Earnings per share 48,600 63,900 67,520 66,000 61,000 3. Prepare the journal entry or entries that are necessary to correct the accounts at 31 December 20X5. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter answer in thousands, not in whole Canadian dollars.) View transaction list Journal entry worksheet Record to correct the accounts for 20x5 due to equipment error. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal In May 20X5, the newly appointed controller of Butch Baking Corporation conducted a thorough review of past accounting, particularly of transactions that exceeded the company's normal level of materiality. As a result of his review, he instructed the company's chief accountant to correct two errors: a. In 20X2, the company made extensive improvements to the baking process and installed a substantial amount of new equipment. The entire cost of the process improvements and equipment was accidentally charged to income as restructuring expense in 20X2. However, the equipment should have been capitalized and added to the factory equipment account. The cost of the equipment was $1,600,000. Butch depreciates its factory equipment on the straight-line basis over 10 years. A full year's depreciation is charged in the year that equipment is acquired. b. A year-end cut-off error occurred in 20X3. A large shipment of nonperishable supplies arrived from China on the last day of 20X3 and had been left in the shipping containers outside the main plant. As a result, the supplies were recorded as received in 20X4 and had not been included in the year-end 20X3 inventory count. The account payable also had not been recorded in 20X3. The supplies cost $104,000. Like most companies, Butch Baking presents a five-year financial summary in its annual report. The 20X4 summary contained the following information (in thousands of dollars, except EPS): Gross revenue Net income Total assets Total liabilities Net assets Earnings per share* 20X0 $ 14,400 1,900 136,000 48,600 87,400 $ 19.00 20x1 $ 15,700 2,060 152,000 63,900 87,400 $ 20.60 20x2 $ 16,900 820 1 42,760 67,520 73,300 $ 8.20 20x3 $ 16,600 2,230 142,000 66,000 73,300 $ 22.30 2 0X4 $ 15,300 1,780 129,000 61,000 74,800 $ 17.80 *100,000 shares outstanding 2. Revise the financial summary. (Enter answer in thousands, not in whole Canadian dollars. Round EPS answers to 1 decimal place.) $ 20x 14,400 1,900 2 0x1 $ 15,700 2,060 20x2 $ 16,900 820 $ 20x3 16,600 2 ,230 $ 20x4 15,300 1,780 136,000 152,000 142,760 142,000 129,000 Gross revenue Net income Adjusted net income Total assets Adjusted total assets Total liabilities Adjusted total liabilities Net assets Earnings per share 48,600 63,900 67,520 66,000 61,000 3. Prepare the journal entry or entries that are necessary to correct the accounts at 31 December 20X5. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter answer in thousands, not in whole Canadian dollars.) View transaction list Journal entry worksheet Record to correct the accounts for 20x5 due to equipment error. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal
