Ffdsdf Essay

690 Words Jun 3rd, 2016 3 Pages
HWI9: Error Correction
Applicable Company accounting policies: 1. Mr.Speakers rounds all transactions to the nearest dollar.
In preparation for taking the company public, Mr.Speakers is currently (beginning of 2019) undergoing its first ever financial statement audit covering 2016-2018. The auditors have uncovered the following problems: 1) On February 28th, 2017 (HW5, #6) Mr.Speakers failed to book sufficient cash, sales tax due, and revenue based on the description of the records of the company. COGS appears to be correct for the transaction. (HINT: Look at the key and recalculate the correct numbers based on the description of the transaction in HW5, some of you may already have the correct numbers calculated in your work,
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What are the amounts of the remaining differences that need to be corrected (please list by individual account)?
R/E, partially counterbalanced, 21360
Cash, Non Counterbalanced, 38500
Sales Tax Due, Non Counterbalanced, 3500
Warranty Liab, Counterbalanced, 0
DTA-ST, Counterbalanced, 0
Taxes payable, partially counterbalanced, 13640 4) Prepare the 2019 correcting journal entry (date it 1/1/2019).
Cash 38500 Sales Tax Due 3500 Taxes payable 13640 R/E 21360

5) Which line items on the 2017 and 2018 financial statements need to be corrected to present correct financial statements (don’t forget totals and subtotals that will change)? Use the tables on the following page to answer this question. Left hand side is the line item, the right-hand side should be the correct amounts.

Balance Sheet | Line Item | 2017 Correct Balance | 2018 Correct Balance | 1.Cash | $583118 | $5197207 | 2.Current DTA | $3965 | $72467 | 3. Total Curr. Assets | $702017 | $8644305 | 4. Total Assets | $1628692 | $9799297 | 5.Sales Tax Due | $16453 | $16453 | 6.Warranty Liability | $4169 | $153769 | 7.Taxes Payable | $27127 |

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