1. Prunedale Co. uses a periodic inventory system. In 2019 company management found the following two errors related to the 2018 financial statements: (1) ending inventory was understated by $17,000, and (2) a purchased of merchandise costing $20,000 was incorrectly recorded as a $2,000 purchase. As a result of these error, Prunedales cost of goods sold for 2018was:

a. overstated by $1,000

b. understated by $1,000

c. Understated by $35,000

d. overstated by $15,000

e. overstated by $35,000

2. Vega Corporation had the following liabilities as of December 31,2018:

• $1,000,000 bonds that are set to mature on June 30, 2019 and will be paid using a bond sinking found.
• $10,000,000 note payable issued in 2018 that will be repaid over a 10 years period in $1,000,000 installments. Thar first $1,000,000 payment is due in December 2019.
• $3,000,000 note payable that is set to mature on February 1, 2019. Vega intends to refinance $2,000,000 of the note on a long-term basis using an existing line of credit.

Vegas December 31, 2018 balance sheet will include long-term liabilities of:

1. $ 11,000,000
2. $ 4,000,000
3. $ 9,000,000
4. $ 10,000,000
5. $ 12,000,000