Problem 8-25 (PHILCPA Adapted)After the issuance of the 2020 financial statements, NarraCompany discovered a computational error of P150,000 inthe calculation of the December 31, 2020 inventory. The errorresulted in a P150,000 overstatement in the cost of goodssold for the year ended December 31, 2020.In October 2021, the entity paid the amount of P500,000 insettlement of litigation instituted against it during 2020.In the 2021 financial statements, what is the pretaxadjustment to retained earnings on January 1, 2021?a. 150,000 creditb. 350,000 debitC. 500,000 debitd. 650,000 credit

Name: Problem 8-25 (PHILCPA Adapted)After the issuance of the 2020 financia
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Description: Problem 8-25 (PHILCPA Adapted)After the issuance of the 2020 financial statements, NarraCompany discovered a computational error of P150,000 inthe calculation of the December 31, 2020 inventory. The errorresulted in a P150,000 overstatement in the c

Solution Concept The overstatement of cost of goods sold means the expenses that has been charged is…

Answered: In the 2021 financial statements, what…

Business

Accounting

In the 2021 financial statements, what is the pretax adjustment to retained earnings on January 1, 2021?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 3MC

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