Describe the effect of the errors on the income statement

Assignment Help Financial Management
Reference no: EM13487042

You will use the information provided below for Costa Company for this application.Below find a working trial balance for Costa Company. This format is often used during the preparation phase of the financial statements since it provides a good overview.

Required:

Your task is to prepare an income statement and a balance sheet in good format after adjusting for the two errors below.

• A physical count of inventory indicates $70,500 on hand.
• There's a check for $5,000 from a customer that has not been recorded in the working trial balance. The sale was never recorded in the first place, so the transaction relating to this sale is missing.

In addition:

1. Describe the effect of the errors on the income statement and balance sheet.
2. Is this company profitable? How do you determine whether or not this is the case?
3. Is the company in a solid financial position? (Comment on balance sheet.)

Modular SLP Assignment Expectations

Always include the name of the organization(s), time period covered and source of information. It is important to answer the questions as posed. The document should be from 2 to 4 pages and written in a clear and concise manner. Don't forget to include tables as required. Support your discussion or tables with references in APA format. You are encouraged to use Excel or other compatible spreadsheet when computations are involved. You can turn in the spreadsheet instead of the Word document. The content should be equivalent to the page length suggested for a word processing document.

Costa Company

31-Dec-12

Trial Balance (accounts in alphabetical order)

Accounts

Working Trial Balance

Balance Sheet

Income Statement

 

Debit

Credit

Debit

Credit

Debit

Credit

 

Credit

Accounts payable

 

$14,500

 

$14,500

 

 

 

 

Accounts receivable

$18,000

 

$18,000

 

 

 

 

 

Cash

41,500

 

41,500

 

 

 

 

 

Common stock

 

10,000

 

10,000

 

 

 

 

Depreciation expense

18,250

 

 

 

18,250

 

 

 

Cost of goods sold

402,610

 

 

 

402,610

 

 

 

Equipment (net of depreciation)

325,000

 

325,000

 

 

 

 

 

Insurance

1,500

 

 

 

1,500

 

 

 

Inventory

80,500

 

80,500

 

 

 

 

 

Long-term debt

 

105,000

 

105,000

 

 

 

 

Marketing

5,600

 

 

 

5,600

 

 

 

Misc. expenses

4,500

 

 

 

4,500

 

 

 

Paid-in capital

 

90,000

 

90,000

 

 

 

 

Property taxes

6,500

 

 

 

6,500

 

 

 

Rent

22,000

 

 

 

22,000

 

 

 

Retained earnings

 

156,400

 

245,500

 

 

 

 

Revenues

 

619,400

 

 

 

619,400

 

619,400

Salaries

61,940

 

 

 

61,940

 

 

 

Utilities

7,400

 

 

 

7,400

 

 

 

 

 

 

 

 

 

 

 

 

Total

$995,300

$995,300

$465,000

$465,000

$530,300

 

 

$619,400

Reference no: EM13487042

Previous Q& A

  What length does the earthling measure

A starcruiser, measured by its passengers to be 80.0m long, whizzes by an Earthling at speed 0.992c. What length does the Earthling measure the ship's length to be

  Explain degradation into mitochondrial pools of pyruvate

Gluconeeogenesis a) occurs in the Golgi apparatus of skeletal muscle tissue b) is typically charaterized by increased flux of carbon skeletons from amino acid degradation into mitochondrial pools of pyruvate and oxaloacetate

  What was the acceleration potential

Electrons are accelerated by a potential and directed upon a thin salt crystal that has inter-atomic spacing of 0.282 cm. What was the acceleration potential

  The environmental compliance manager for a profitable

The environmental compliance manager for a profitable

  What is the maximum stretch of the spring

A spring with stiffness 125 N/m and relaxed length 0.50 m hangs vertically from the ceiling. what is the maximum stretch of the spring

  State the iupac name of isomer

Write a line angle formula of each constitutional isomer of dimethylcyclohexane. Write the IUPAC name of each isomer.

  What is special about the human manifestation

What is special about the human manifestation of the toa vis & vis the universal manifesting of the Dao throughout ala of nature.

  Determine average power is delivered to the circuit

A series RLC circuit has a resistance of 10 ? and an impedance of 80 ?. If the rms voltage applied to the circuit is 170 V, what average power is delivered to the circuit

  What is the total resistance of the circuit

In a certain series RLC circuit, Irms = 9.00 A, ?Vrms = 155 V, and the current leads the voltage by 31.0°. What is the total resistance of the circuit

  What is special about the human manifestation

What is special about the human manifestation of the toa vis & vis the universal manifesting of the Dao throughout ala of nature

Reviews

Write a Review

 

Similar Q& A

  Problem 1on completion of mba eddie and mike were so

problem 1on completion of mba eddie and mike were so pleased with the amount of useful and interesting knowledge that

  Question 1use runge-kutta method of order four to

question 1use runge-kutta method of order four to approximate the solution fory 5y 5t2 2t 0 le t le 1 y0 13 with

  You have just graduated and one of your favorite courses

you have just graduated and one of your favorite courses was financial management.nbsp while you were in school your

  Evaluate the required monthly mortgage payment

Evaluate the required monthly mortgage payment for Mr. Davidson and construct the 2014~2018 amortization table for Mr. Davidson.

  1 assume that you were a manager of a large department in a

1. assume that you were a manager of a large department in a company and you received a request from your supervisors

  A central issue for its senior managers

The strategic positioning of your chosen organisation is a central issue for its senior managers. As you know from your readings, strategic positioning has two important themes: strategic potential and organisational ambitions (page 46 of your text -..

  Provide a swot analysis of netflix from 2011 and consider

netflix swot analysis project1.please read all you can find on netflix from the time of the 2011 debacle over quikster

  Memorandumtonbspnbspnbspnbspnbspnbsp nbspnbsp management

memorandumtonbspnbspnbspnbspnbspnbsp nbspnbsp management analystfromnbspnbsp nbspnbsp beverly bunchbb budget

  Avantimedia is the wholly owned italian affiliate of abc a

avantimedia is the wholly owned italian affiliate of abc a u.s. based multinational firm.avantimedia produces projector

  Organisations behaviour is guided by financial data in the

organisations behaviour is guided by financial data. in the short term such data will help determine operational

  What is the total risk-weighted-assets for credit risk

How much Tier 1 and Tiear 2 capital is required? How does this compare with the capital required under the Basel II standardized approach and under Basel I?

  State the intrinsic value and the speculative premium

State the intrinsic value and the speculative premium for the call and put options. Why is the speculative premium so small for each option - Use the Black-Scholes OPM to find C.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd