Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

At December 31, 2019, Dorothy Taylor Corporation reported current assets of $396,220 and current liabilities of $193,800. The following items may have been recorded incorrectly

image text in transcribed

At December 31, 2019, Dorothy Taylor Corporation reported current assets of $396,220 and current liabilities of $193,800. The following items may have been recorded incorrectly Goods purchased costing $24,190 were shipped f.o.b.shipping point by a supplier on December 28. Taylor received and recorded the invoice on December 29, 2019, but the goods were not included in Taylor's physical count of inventory because they were not received until January 4, 2020. 1. Goods purchased costing $13,620 were shipped f.o.b.destination by a supplier on December 26. Taylor received and recorded the invoice on December 31, but the goods were not included in Taylor's 2019 physical count of inventory because they were not received until January 2, 2020. 2. Goods held on consignment from Claudia Kishi Company were included in Taylor's December 31, 2019, physical count of inventory at $12,840. 3. Freight-in of $3,130 was debited to advertising expense on December 28, 2019. 4. Compute the current ratio based on Taylor's balance sheet. (Round ratio to 2 decimal places, e.g. 2.31:1.) The current ratio :1 Recompute the current ratio after corrections are made. (Round ratio to 2 decimal places, e.g. 2.31:1.) The current ratio 1 By what amount will income (before taxes) be adjusted up or down as a result of the corrections? Assume that goods are sold in item #4 Adjust Income $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Edp Objective Questions And Explanations

Authors: Irvin N. Gleim, William A. Hillison

5th Edition

0917537521, 978-0917537523

More Books

Students also viewed these Accounting questions