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The following are data for MAMA Company You have discovered that the merchandise inventory at the end of each year were understated by P100,000 and
The following are data for MAMA Company You have discovered that the merchandise inventory at the end of each year were understated by P100,000 and P200,000 in 2019 and 2020. In addition, in inspecting the records of the company, you discovered some items that had improperly recorded and the certain year-end adjustments had been overlooked in 2007 and 2008. These omissions and other errors for each year are summarized as follows: 12-31-2019 873,600.00 12-31-2020 780,000.00 259,200.00 213,000.00 307,800.00 384,000.00 470,400.00 561,000.00 Accrued Salaries Accrued Interest Income Prepaid Insurance Advances from customers (collections from customers had been recorded as sales but should have been recognized as advances from customers because goods were not shipped until the following year) Machinery (capital expenditures had been recorded as repairs but should have charged to machinery; the depreciation rate is 10% per year, but the depreciation in the year of expenditure is to be recognized at 5% 564,000.00 522,000.00 a Compute What is the total effect of the errors on the 2019 net income - lagyan parenthesis pag overstated b What is the total effect of the errors on the 2020 net income - lagyan parenthesis pag overstated Total effect of errors on retained earnings at 01-01-2020 (lagyan parenthesis pag overstated) d Total effect of errors on retained earnings at 12-31-2020 (lagyan parenthesis pag overstated) e What is the effect of 2019 errors in 2020 income statement (lagyan parenthesis pag overstated) f Total effect of errors on company's working capital at 12-31-2020 (lagyan parenthesis pag overstated) g An adjusting entry to correct the amount of machinery for 12-31-2019 includes a credit to retained earnings of how much
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