13) Green Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/20 and 12/31/21 contained the following errors:

2020 2021

Depreciation expense 15,000 overstatement 40,000 overstatement

Assume that the 2020 error was not corrected and that no errors occurred in 2019. By what amount will 2020 income before income taxes be overstated or understated?

14) Orange Co. began operations on January 1, 2020. Financial statements for 2020 and 2021 contained the following errors:

Dec. 31, 2020 Dec. 31, 2021

Depreciation expense 150,000 overstated

In addition, on December 31, 2021 fully depreciated equipment was sold for $50,000, but the sale was not recorded until 2022. No corrections have been made for any of the errors. Ignore income tax considerations.

The total effect of the errors on the balance of Orange's retained earnings at December 31, 2021 is understated by?

15) ABC Company purchased equipment that cost $200,000 on January 1, 2019. The entire cost was recorded as an expense. The equipment had a ten-year life. ABC uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2022. ABC is subject to a 20% tax rate.

What is the adjustment to retained earnings at January 1, 2022?

16) Yellow Corporation had net income for 2021 of $2,000,000. Additional information is as follows:

Depreciation of plant assets $500,000

Amortization of intangibles 200,000

Decrease in inventory 400,000

Decrease in rent payable 300,000

Yellows net cash provided (used) by operating activities for 2021 was?