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 $1,200,000. 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 2003. 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 2003. The supplies cost $131.000. 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) 20x0 20X1 20X2 20X3 20X4 Gross revenue $ 15,500 $ 16,600 $ 17,600 $ 17,300 $ 16.100 Net income 2,050 2.190 860 2.320 1880 Total assets 146,000 162.000 149,740 148,000 136,000 52.200 68,000 70,810 70.000 64.000 Net assets 93,900 93.900 81,600 81,600 82,600 Earnings per $ 20.50 $ 21.90 $ 8.60 $ 23,20 $ 18.80 share! Total liabilities 100.000 shares outstanding Required: 1 Not available in Connect 2. Revise the financial summary Enter answer in thousands, not in whole Canadian dollars. Round EPS answers to decimal place.) Total liabilities Net assets Eemings per share 52,200 68,000 70,810 70,000 64,000 93,900 93,900 81,600 B1,600 82,600 $ 20.50 $ 21.90 $ 8.60 $ 23.20 $ 18.BO *100,000 shares outstanding Required: 1. Not available in Connect. 2. Revise the financial summary. (Enter answer in thousands, not in whole Canadian dollars. Round EPS answers to decimal place) 20X3 20x4 $ 16.100 $ $ 200 15,500 $ 2.050 2.050 146,000 20X2 17,600 860 $ 20x1 16,600 2.190 2 190 102,000 17.300 2.320 1.880 149.740 148.000 135,000 Gross revenue Net income Adjusted net income Total assets Adjusted total assets Total liabilities Adjusted total abilities Net assets Eamings per share 52 200 68,000 70.810 70.000 64.000 3. Prepare the journal entry or entries that are necessary to correct the accounts at 31 December 20X5 af no entry is required for a in the Rain Prey 34 HIE Next > 3. Prepare the journal entry or entries that are necessary to correct the accounts at 31 December 20X5. antry regulen les traction event select No journal entry required in the fint inccount intervin thousand, not in whole dan do. View transaction list Journal entry worksheet 1 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
