A review of Anderson Corporations books indicates that the errors and omissions pertaining to the balance sheet

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A review of Anderson Corporation’s books indicates that the errors and omissions pertaining to the balance sheet accounts shown as follows had not been corrected during the applicable years. The net income per the books is: 2017, $10,000; 2018, $12,000; 2019, $15,000; and 2020, $20,000. No dividends were declared during these years and no adjustments were made to retained earnings. The Retained Earnings balance on December 31, 2020, is $50,000.

Omissions Ending Inventory Overvalued Unearned Ending Inventory Undervalued Prepaid Expense Accrued Accrued December 31


Required:
Determine the correct net income for the years 2017, 2018, 2019, and 2020, and the adjusted balance sheet accounts as of December 31, 2020. Ignore possible income tax effects.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Intermediate Accounting Reporting and Analysis

ISBN: 978-1337788281

3rd edition

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

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