Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

W AMLHeck USG Greek Bill Movies The before-tax income for Ivanhoe Co. for 2020 was $110,000 and $79,200 for 2021. However, the accountant noted

image text in transcribed

" W AMLHeck USG Greek Bill Movies The before-tax income for Ivanhoe Co. for 2020 was $110,000 and $79,200 for 2021. However, the accountant noted that the following errors had been made 1 Sales for 2020 included amounts of $37,300 which had been received in cash during 2020, but for which the related products were delivered in 2021. Title did not pass to the purchaser until 2021 2. The inventory on December 31, 2020, was understated by $8,800. 3. The bookkeeper in recording interest expense for both 2020 and 2021 on bonds payable made the following entry on an annual basis. Interest Expense 13,800 Cash 13,800 The bonds have a face value of $230,000 and pay a stated interest rate of 6%. They were issued at a discount of $15,000 on January 1, 2020, to yield an effective interest rate of 7%. (Assume that the effective yield method should be used.) 4. Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2020 and 2021. Repairs in the amount of $8.400 in 2020 and $8.700 in 2021 were so charged. The company applies a rate of 10% to the balance in the Equipment account at the end of the year in its determination of depreciation charges Prepare a schedule showing the determination of corrected income before taxes for 2020 and 2021. (Enter negative amounts using either a negative sign preceding the numbereg.-15,000 or parentheses es (15,000). Round answers to decimal places, eg, 125) 2020 2021 Income Before Tax Corrections: Corrected Income Before Tax

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

Financial Accounting A Critical Approach

Authors: John Friedlan

1st Edition

0130193720, 978-0130193728

More Books

Students also viewed these Accounting questions