PROBLEM 14-29

2020 Accounts Receivable 250,000.00

Retained Earnings
Sales
To record unrecorded accounts receivable on DEC 31, 2020

Retained Earnings 350,000.00

Advances to upplier 100,000.00
Purchases
Accounts Payable
To record unrecorded accounts payable

Expenses 30,000.00
Retained Earnings 70,000.00
Accrued Expenses
To record accrued expenses on Dec 31, 2020

Inventory-beg 150,000.00
Income Summary
Unrecorded inventory on Dec 31,2020

Inventory- end 210,000.00

Income Summary
Unrecorded inventory on Dec 31, 2019

Retained Earnings 310,000.00

Deprecition 320,000.00
Accumulated Depreciation- Equipt
Accumulated Depraciation- bdg
Depreciation for 2020 and unrecorded dep 2019

Doubtful Accounts 25,000.00

Allowance for Doubtful Accounts
To record Doubtful accounts

Interest Expense 36,000.00

Interest Payable
To record interest Exp

Computation/ Notes
1 Sales, Cash basis 4,000,000.00
AR, end 250,000.00
AR, beg. (200,000.00)
Prior Period, adj 40,000.00
Sales 4,090,000.00
2 Purchases, cash basis 2,000,000.00
A/P-end 280,000.00
A/P-beg (350,000.00)
Error 100,000.00
Purchases 2,030,000.00
Inventory-beg 150,000.00
Inventory-end (210,000.00)
COGS 1,970,000.00

3 Expenses
Accrued Exp-end
Accrued Exp-beg
Expenses

RE, unadjusted 600,000.00

Errrors:
Sales Earned, 2019 200,000.00
Prior period sales adjustment (40,000.00)
Unrecorded Purch, 2019 (350,000.00)
Accrued Exp (70,000.00)
Unrecorded Inventory 150,000.00
Unrecorded Depreciation (310,000.00)
RE. adjusted 180,000.00

Zamboanga Company
Income Statement
Year Ended December 31, 2020

Sales 4,090,000.00
Cost of Sale 1,970,000.00
Gross Profit 2,120,000.00

Expenses 1,530,000.00
Depreciation 320,000.00
Doubtful Accounts 25,000.00
Interest Expense 36,000.00 1,911,000.00
Net Income $ 209,000.00

Zamboanga Company
Statement of Financial Position
Year Ended December 31, 2020
 CURRENT ASSETS
Cash 1,500,000
Accounts Receivable-net 225,000
Inventory 210,000
Advances to Supplier 100,000
Total Current Assets $ 2,035,000.00

NCA
Equipt-net 170,000
Bldg-net 900,000
Land 800,000
TNCA 1,870,000
TOTAL ASSETS $ 3,905,000.00

LIABILITIES AND SHAREHOLDER'S EQUITY

Current Liabilities
Accounts Payable 280,000
Accrued Expenses 136,000
TCL 416,000

NCL
Mortgage Payable 900,000

Equity
Share Capital 2,000,000
Retained Earnings(180k+409k) 589,000
Shareholder's Equity 2,589,000
$ 3,905,000.00

PROBLEM 14-30
2020
Dec-31 Accounts Receivable 40,000.00
Sales 40,000.00
Unrecorded AR for Dec 31, 2020

Purchases 30,000.00
Accounts Payable 30,000.00
Unrecorded Accounts payable on Dec 31, 2020

Inventory-end 230,000.00
Income Summary 230,000.00
 Unrecorded inventory on Dec 31, 2020

Doubtful Accounts 15,000.00

Allowance for Doubtful Accounts 15,000.00
To record Doubtful Accounts

Depreciatiom 90,000.00
Accumulated Depreciation-equipt. 40,000.00
Accumulated Depreciation-blg 50,000.00
Unrecorded Depreciation on Dec 31, 2019

Rent 5,000.00
Retained Earnings 5,000.00
Accrued Rent 10,000.00
Unrecorded Accrued Rent on Dec 31, 2019

Prepaid Insurance 12,000.00

Retained Earnings 5,000.00
Insurance 7,000.00
Unexpired Insurance on Dec 31, 2020

Computations:
1 Sales, Cash basis 2,000,000.00
AR,end 290,000.00
AR, beg (250,000.00)
Sales, Cash basis 2,040,000.00

2 Purch, Cash Basis 1,200,000.00

AP, end 130,000.00
AP, beg (100,000.00)
Purchases 1,230,000.00
Inv, beg 150,000.00
Inv, end (230,000.00)
COGS 1,150,000.00

3 RE, unadjusted 345,000.00

Errors:
Unrecorded Rent, 2019 (5,000.00)
Unrecorded Insurance 7,000.00
RE, adjusted 347,000.00

Evelyn Company
Income Statement
Year Ended December 31, 2020
Sales 2,040,000.00
Cost Of sales 1,150,000.00
Gross Profit 890,000.00

Office Expenses 255,000.00

Depreciation 90,000.00
Doubtful Accounts 15,000.00
Rent 245,000.00
Insurance 45,000.00
Supplies Expense 140,000.00 790,000.00
Net Income $ 100,000.00

Evelyn Company
Statement of Financial Position
Year Ended December 31, 2020

ASSETS
Current Assets
Cash 200,000.00
Acct. receivable -Net 275,000.00
Inventory 230,000.00
Prepaid Insurance 12,000.00
Total Current Assets 717,000.00

Non-Current Assets
Equipment-netBldg-net 320,000.00
Land 750,000.00
Total NCA 300,000.00 1,370,000.00
TOTAL ASSETS $ 2,087,000.00

LIABILITIES AND SHAREHOLDER'S EQUITY

Current Liabilities
Accounts Payable 130,000.00
Accrued Expenses 10,000.00
Total Current Liabilities 140,000.00
Equity
Share Capital 15,000,000.00
Retained Earnings (180k+409k) 447,000.00
Shareholder's Equity 1,947,000.00
$ 2,087,000.00
160,000.00
90,000.00

170,000.00
280,000.00

100,000.00

150,000.00

210,000.00

30,000.00
600,000.00

25,000.00

36,000.00