In reconciling information to complete its financial statements,Flying High Corporation discovered the following situations:
Required: Assuming that no depreciation had been recorded,recompute depreciation expense,bad debt expense,net income before taxes,income tax expense,and net income.

Question

In reconciling information to complete its financial statements,Flying High Corporation discovered the following situations:
  Required: Assuming that no depreciation had been recorded,recompute depreciation expense,bad debt expense,net income before taxes,income tax expense,and net income.

Quizplus · Accepted Answer

Since no depreciation had been recorded, it needs to be computed and recorded in the financial statements. This will affect the amounts of depreciation expense, net income before taxes, income tax expense, and net income. Similarly, if bad debt expense had not been recorded, it needs to be computed and recorded in the financial statements as well.

In Reconciling Information to Complete Its Financial Statements,Flying High Corporation