Question
You have been assigned to examine the financial statements of Mari, Inc. for the year ended December 31, 2023. You discover the following situations in
You have been assigned to examine the financial statements of Mari, Inc. for the year ended December 31, 2023. You discover the following situations in February 2024.
5. Mari, Inc. has not recorded any depreciation for a machine they purchased on October 1, 2021. They paid $250,000 for the machine which has a salvage value of $10,000 and useful life of 6 years.
6. The company has estimated warranty expense to be 1.8% in the past and made an entry for $145,00 in 2023. However, the company decided that it should only be 1.6% this year which amounts to $125,000.
Instructions
- Assume the trial balance has been prepared but the books HAVE NOT been closed for 2023. Assuming all amounts are material, prepare journal entries showing the adjustments that are required. (Ignore income tax considerations).
- Assume the trial balance has been prepared but the books HAVE been closed for 2023. Assuming all amounts are material, prepare journal entries showing the adjustments that are required. (Ignore income tax considerations).
- Prepare a schedule correcting net incomes for 2021, 2022 and 2023 assuming the books HAVE NOT been closed for 2023.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started