1. On December 31, 2021, Dubai Company completed the preparation of the financial statements, the review...
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1. On December 31, 2021, Dubai Company completed the preparation of the financial statements, the review of these statements by the external auditors revealed the following errors: 1. Beginning inventory balance was understated by $500. 2. Ending inventory balance was understated by$300. 3. Sales discount of $200 was recorded as purchase discount. 4. Received $ 4,000 cash from customers was recorded as cash sales. Determine the effect of each of the above errors on: Net Sales; Net purchase; COGAS; COGS; Gross income (loss); Net income, Current assets and Equity. (4 marks) Answer: Use the below template for your answer: Error %23 Net Sales Net COGAS COGS Gross I(L) Net I (L) Current Equity purchase Assets 1. 2. 3. 4. 1. On December 31, 2021, Dubai Company completed the preparation of the financial statements, the review of these statements by the external auditors revealed the following errors: 1. Beginning inventory balance was understated by $500. 2. Ending inventory balance was understated by$300. 3. Sales discount of $200 was recorded as purchase discount. 4. Received $ 4,000 cash from customers was recorded as cash sales. Determine the effect of each of the above errors on: Net Sales; Net purchase; COGAS; COGS; Gross income (loss); Net income, Current assets and Equity. (4 marks) Answer: Use the below template for your answer: Error %23 Net Sales Net COGAS COGS Gross I(L) Net I (L) Current Equity purchase Assets 1. 2. 3. 4.
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COMPUTATION OF EFFECT OF EACH ERRORS NET SALES NET PURCHASE COGAS COGS GROSS IL NET IL CURRENT ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson, Wayne Thomas
Posted Date:
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