Bookz Co pays royalties to writers annually, in February, the payment covering the previous calendar year. As at the end of December 20X2, Bookz Co had accrued $100,000 in royalties due to writers. However, a check of the royalty calculation performed in January 20X3 established that the actual figure due to be paid by Bookz Co to writers was $150,000. Before this under-accrual was discovered, Bookz Co's draft statement of profit or loss for the accounting year ended 31 December 20X2 showed a profit of $125,000 and their draft statement of financial position showed net assets of $375,000. What will Bookz Co's profit and net asset position be after an entry to correct the under-accrual has been processed? Profit for the year Net asset position
A、$175,000 $425,000
B、$125,000 $375,000
C、$75,000 $325,000
D、$25,000 $225,000
A、$175,000 $425,000
B、$125,000 $375,000
C、$75,000 $325,000
D、$25,000 $225,000
【参考答案及解析】
The double entry to record the accrual in the accounts is: Dr Expenses (SPL) $50,000 Cr Accruals (SOFP) $50,000 This reduces profit from $125,000 to $75,000 and the net asset position from $375,000 to $325,000
The double entry to record the accrual in the accounts is: Dr Expenses (SPL) $50,000 Cr Accruals (SOFP) $50,000 This reduces profit from $125,000 to $75,000 and the net asset position from $375,000 to $325,000