3a. Anderson Company's December 31 year-end financial statements contained the following errors:

Dec. 31, 2017 Dec. 31, 2018

Ending inventory $37,500 understated $55,000 overstated

Depreciation expense 10,000 understated

An insurance premium of $90,000 was prepaid in 2017 covering the years 2017, 2018, and 2019. The prepayment was recorded with a debit to insurance expense. In addition, on December 31, 2018, fully depreciated machinery was sold for $47,500 cash, but the sale was not recorded until 2019. There were no other errors during 2018 or 2019 and no corrections have been made for any of the errors. The effective income tax rate is 27% in all years.

3a-1. What is the total net effect of the errors on Anderson's 2018 net income?

3a-2. Write the necessary prior period adjustment for December 31, 2018. Show your labelled work to support each amount.

3b. The following information is available for Reich Company for its 2017 operations: Accounts receivable, January 1, 2017 $ 40,000 Accounts receivable collected during 2017 84,000 Cash sales during 2017 20,000 Inventory, January 1, 2017 48,000 Inventory, December 31, 2017 44,000 Purchases of inventory during 2017 80,000 Gross profit on sales 42,000 What is Reichs accounts receivable balance at December 31, 2017?

3c. Lema Inc. issued $500,000 of 6% bonds that mature in 10 years. These bonds pay interest every January 1 and July 1. The yield on these bonds at issuance was 7%. 3c-1. How much cash did Lema receive from the sale of its bonds? 3c-2. Explain why (in simple English) the price you computed was the same, more or less than the face amount of the bonds.

3d. The balance in Dodds Corps accounts receivable at the beginning of 2018 was $300. During 2018, $1,600 of credit sales were recorded. The ending balance in accounts receivable was $250 and $100 in accounts receivable were written off during the year. How much cash did Dodds collect from customers during 2018?

3g. Shea Produce estimates bad debt expense at % of ending accounts receivable. Shea reported accounts receivable and allowance for uncollectible accounts of $471,000 and $1,650, respectively, at December 31, 2017. During 2018, Shea's credit sales and collections were $315,000 and $319,000, respectively, and $1,720 in accounts receivable were written off. What is Shea's final balance in its allowance for uncollectible accounts at December 31, 2018?