During 2021, Gamma Ltd discovered that some of their products sold during 2020 were incorrectly included...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
During 2021, Gamma Ltd discovered that some of their products sold during 2020 were incorrectly included in inventory as 31 December 2020 at R6 500. Assume a tax rate of 30%. Assume that the prior period error effect is considered to be material Gamma Ltd.'s accounting records are as follows: Sales Cost of sales Profit before tax Taxation Profit 2021 Additional information: 208 000 (173 500) 35 000 (10 500) 24 500 2020 147 000 (107 000) 40 000 (12 000) 28 000 The profit for 2021 includes R13 500 for the error made in opening inventory 2020 opening retained earnings was R40 000 and closing retained earnings was R68 000. Gamma's income tax rate was 30% in 2021 as well as in 2020. It had no other income or expenses. Gamma Ltd has R10 000 of share capital throughout 2020 and 2021, as well as retained earnings REQUIRED: Disclose the effect of the error in the financial statements for the year ended 31 December 2021 During 2021, Gamma Ltd discovered that some of their products sold during 2020 were incorrectly included in inventory as 31 December 2020 at R6 500. Assume a tax rate of 30%. Assume that the prior period error effect is considered to be material Gamma Ltd.'s accounting records are as follows: Sales Cost of sales Profit before tax Taxation Profit 2021 Additional information: 208 000 (173 500) 35 000 (10 500) 24 500 2020 147 000 (107 000) 40 000 (12 000) 28 000 The profit for 2021 includes R13 500 for the error made in opening inventory 2020 opening retained earnings was R40 000 and closing retained earnings was R68 000. Gamma's income tax rate was 30% in 2021 as well as in 2020. It had no other income or expenses. Gamma Ltd has R10 000 of share capital throughout 2020 and 2021, as well as retained earnings REQUIRED: Disclose the effect of the error in the financial statements for the year ended 31 December 2021
Expert Answer:
Answer rating: 100% (QA)
The error made in 2020 will have the following effect on Gamma Ltds financial statements f... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The accountant preparing the income statement for Bakersfield, Inc. had some doubts about the appropriate accounting treatment of the seven items listed below during the fiscal year ending December...
-
Jen and Berry's sells ice-creams from its factory-shop in Petone. There is a managing director (Maynard Dibble), a marketing manager (Mary Salman) and a production manager (Peter Pritchard). Maynard...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Peppers Lockdown produces keys for homes and cars. As Peppers is planning for next year's production, he decided to implement a high-low system to forecast future costs. With total production of...
-
Northwest Company produces two types of glass shelving, rounded edge and squared edge, on the same production line. For the current period, the company reports the following data. Northwests...
-
A ship's captain sees a lighthouse at a bearing of 105. Then the captain sails 8.8 nautical miles on a bearing of 174. The lighthouse is now at a bearing of 52. How far is the ship from the...
-
Review the California form interrogatories for particular civil cases at www.courts.ca.gov/formsrules.htm. Are these questions helpful in developing your own set of interrogatories in a case?
-
Which of the following estate planning documentswill, codicil, letter of last instructions, living willdo the following individuals/families need? Explain your rationale. a. Kayla, a recent college...
-
7. Which one of the following time periods is included in the accounts receivable period but not in the cash collection period? Points) period of time it takes an invoice to reach a customer by mail...
-
Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique?s demand curve, marginal revenue curve (MR), marginal cost curve...
-
4. The following is from the press announcement of the 2023 Nobel Prize in Economics: KUNGL. VETENSKAPS AKADEMIEN THE ROYAL SMEDSH ACADEMY OF SCIENCES 10 October 2022 The Royal Swedish Academy of...
-
Why is viscous damping used in most cases rather than other types of damping?
-
If the characteristic roots have a zero imaginary part, the response of the system will be: a. oscillatory b. nonoscillatory c. steady
-
What is the difference between the peak amplitude and the resonant amplitude?
-
The frequency of oscillation of the response of a system will be higher if the imaginary part of the roots is: a. smaller b. zero c. larger
-
True or False. The phase angle of the response depends on the amplitude of the forcing function.
-
13 The "normal" eye has a near point of 25 cm. If a given individual's near point is 41 cm, for what problem will the eye doctor prescribe correction? O hyperopia O myopia O presbyopia O astigmatism...
-
Repeat the previous problem, but close the positions on September 20. Use the spreadsheet to find the profits for the possible stock prices on September 20. Generate a graph and use it to identify...
-
The table below itemizes several assets. Assume in all cases that the assets first and last years are full years and all assumptions and estimates used to derive depreciation remain unchanged...
-
Adobe Financial specializes in providing financing for commercial real estate purchases. The companys main source of income is the interest charged on these loans. At the end of 2011, the company had...
-
Dough company manufactures specialized golf clubs in Toronto. Anthony Corporation manufactures sports equipment, including golf clubs, but in Calgary. Anthony has a machine that it exchanges with...
-
A pipe, through which water is flowing, has diameters \(30 \mathrm{~cm}\) and \(15 \mathrm{~cm}\) at crosssections 1 and 2 respectively. The discharge velocity of the pipe is \(40 \mathrm{~L} /...
-
A pipe, through which water is flowing, has diameters \(30 \mathrm{~cm}\) and \(15 \mathrm{~cm}\) at cross-sections 1 and 2 respectively. The discharge of the pipe is \(40 \mathrm{~L} / \mathrm{s}\)....
-
A nozzle, through which steam at \(500 \mathrm{kPa}\) and \(623 \mathrm{~K}\) is entering at the rate of \(12 \mathrm{~kg} / \mathrm{s}\) and leaving at \(500 \mathrm{kPa}\) and \(523 \mathrm{~K}\),...
Study smarter with the SolutionInn App