The before-tax income for Lonnie Holdiman Co. for 2014 was $101,000 and $80,000
ID: 2455836 • Letter: T
Question
The before-tax income for Lonnie Holdiman Co. for 2014 was $101,000 and $80,000 for 2015. However, the accountant noted that the following errors had been made:
Interest Expense
10,160
Cash
10,160
Prepare a schedule showing the determination of corrected income before taxes for 2014 and 2015. (Enter negative amounts using either a negative sign preceding the number e.g. -15,000 or parentheses e.g. (15,000). Round answers to 0 decimal places, e.g. 125.)
2014
2015
Income Before Tax
Corrections:
Corrected Income Before Tax
1. Sales for 2014 included amounts of $35,000 which had been received in cash during 2014, but for which the related products were delivered in 2015. Title did not pass to the purchaser until 2015. 2. The inventory on December 31, 2014, was understated by $8,700. 3. The bookkeeper in recording interest expense for both 2014 and 2015 on bonds payable made the following entry on an annual basis.Explanation / Answer
Particulars 2014 2015 Profit b4 Tax 101000 80000 Adjustments: Sales error -35000 +35000 Inventory +8700 -8700 Wrong Interest +10160 +10160 Correct Interest -12163.6 -12163.6 Repairs -7800 -9500 Depreciation +780 +950 + 702 Correct Profit b4 Tax 65676.4 96448.4
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.