For three years, BLUEBIRDS MDSE. failed to recognize accruals, prepayments and other transactions in its accounts....

 

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For three years, BLUEBIRDS MDSE. failed to recognize accruals, prepayments and other transactions in its accounts. Reported net income and listing of the error appear below: Unadjusted net income (loss) 1. Checks written in December and mailed on January 3 of the following year. 2. Overstatement of ending inventories 3. Failed to recognize unearned revenue 4. Failed to record purchase on account and mdse 2002 150,000 250 36,000 properly included in ending inventory 5. Failed to recognize unused supplies at the end of year 6. Failed to record accrued commission expenses 7. Understatement of depreciation expenses 8. Worthless accounts written not written off by year end 9. Failed to recognize gain on sale of land; Land credited for the proceeds 10. Failed to record accrued salaries 3,750 25,000 15,000 625 75,000 16,250 Requirements: and the adjusting entries to correct the books at the end of 2004. 2003 500,000 375 28,000 6,250 31,250 18,750 750 22,500 2004 ( 125,000) 500 11,250 50,000 5,000 60,000 18,750 875 Prepare a schedule to correct the reported net income for each year For three years, BLUEBIRDS MDSE. failed to recognize accruals, prepayments and other transactions in its accounts. Reported net income and listing of the error appear below: Unadjusted net income (loss) 1. Checks written in December and mailed on January 3 of the following year. 2. Overstatement of ending inventories 3. Failed to recognize unearned revenue 4. Failed to record purchase on account and mdse 2002 150,000 250 36,000 properly included in ending inventory 5. Failed to recognize unused supplies at the end of year 6. Failed to record accrued commission expenses 7. Understatement of depreciation expenses 8. Worthless accounts written not written off by year end 9. Failed to recognize gain on sale of land; Land credited for the proceeds 10. Failed to record accrued salaries 3,750 25,000 15,000 625 75,000 16,250 Requirements: and the adjusting entries to correct the books at the end of 2004. 2003 500,000 375 28,000 6,250 31,250 18,750 750 22,500 2004 ( 125,000) 500 11,250 50,000 5,000 60,000 18,750 875 Prepare a schedule to correct the reported net income for each year