Question
You have been assigned to examine the financial statements for the year ended December 31, 2015. You discover the following situations in February 2016. 1.Thecompanyreceived$24,000fromacustomeronaspecialorderonDecember22,2015.Itwasrecordedasasaleonthedaythemoneywasreceived.ThemerchandisearrivedatplaceofbusinessonJanuary16,2016andshippedittothecustomeronJanuary17,2016.
You have been assigned to examine the financial statements for the year ended December 31, 2015. You discover the following situations in February 2016.
- 1.Thecompanyreceived$24,000fromacustomeronaspecialorderonDecember22,2015.Itwasrecordedasasaleonthedaythemoneywasreceived.ThemerchandisearrivedatplaceofbusinessonJanuary16,2016andshippedittothecustomeronJanuary17,2016.
- 2.In2015,thecompanysoldequipmentfor$2,200whichoriginallycost$25,000andhadabookvalueof$4,000.
- Thecompanyrecordedthefollowingonthedateofsale:
Cash 2,200
Equipment 2,200
a) Assume the trial balance has been prepared but the books HAVE NOT been closed for 2015. Assuming all amounts are material, prepare journal entries showing the adjustments that are required. (Ignore income tax considerations).
b) Assume the trial balance has been prepared but the books HAVE been closed for 2015. Assuming all amounts are material, prepare journal entries showing the adjustments that are required. (Ignore income tax considerations).
c) Prepare a schedule correcting net incomes for 2013, 2014 and 2015.
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Intermediate Accounting Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
12th Canadian edition
119-49633-5, 1119496497, 1119496330, 978-1119496496
