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Rosalyn Company, a publicly owned corporation was incorporated in January 1, 2004 and reported thefollowing net income for the past 3 years:
2004: P1,600,000;
2005: P1,900,000;
2006: P2,400,000

The following items were discovered in 2006 while preparing Rosalyn Company’s 2006 financialstatements:

•Depreciation of P32,000 for 2006 on delivery trucks was not recorded

•The physical inventory count on December 31, 2005, improperly excluded merchandise costing P190,000 that had been temporarily stored in a public warehouse

•The physical inventory count on December 31, 2006, improperly included merchandise being held onconsignment in the amount of P89,000

•An equipment was purchased on January 3, 2006, for P32,000 and was charged to Repairs andMaintenance. The equipment has an estimated life of 8 years and no residual value. Rosalyn Company uses the straight-line method for this type of equipment

•Rosalyn Company failed to accrue sales commissions payable at the end of each of the last 2 years asfollows: December 31, 2005, P40,000; December 31, 2006, P25,000

•Wages payable on December 31 have been consistently omitted from the records of that date and havebeen entered as expenses when paid in the following year. December 31, 2004:
P140,000
December 31, 2005: 160,000
December 31, 2006: 180,000

•Invoices for office supplies purchased have been charged to expense accounts when received. Inventoriesof supplies on hand at the end of each year have been ignored, and no entry has been made for them
December 31, 2004: P13,000
December 31, 2005: 7,400
December 31, 2006: 14,200

The adjusted net income for 2006 is ?

a. 2,118,800
b. 2,116,200
c. 2,681,200
d. 1,989,200
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Sagot :

sasakitoudou

Answer:

Letter b

Explanation:

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