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solution needed The annual audit of the accounting records and draft financial statements of Moala Ltd...

solution needed

The annual audit of the accounting records and draft financial statements of Moala Ltd as at 30 June 2017 revealed the following errors and omissions:

  1. The purchase price of $55 000 for a new vehicle on 1 January 2016 was posted to the vehicle maintenance expense account. Motor vehicles are depreciated at 25% p.a. straight-line.
  2. No adjustment to the allowance for doubtful debts has been made to reflect the fact that a major debtor owing $20 000 went into liquidation after the end of the reporting period. Correspondence with the liquidator indicates that the expected payout will be no more than 10c in the dollar.
  3. A manufacturing assembly line has been taken out of operation pending its sale. The asset had a carrying amount of $50 000 as at 30 June 2017 and is likely to be sold for a profit.
  4. Credit notes totaling $63 000 relating to June sales were posted against sales made in July.
  5. No disclosure has been made about a fire in the warehouse during May that caused damage worth $10 000. The warehouse and its contents are fully insured.

Required: Prepare the necessary adjustments or note (if any) for all items.

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jeff jeffy answered 1 year ago
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