a. Ignoring income tax, what is the total effect of the errors on net income for 2018?

200,000 understated

200,000 overstated

260,000 understated

0

b. What is the net income for 2019?

c. what is the balance of retained earnings on dec. 31, 2019

BSA-A03 began operations on January 1, 2018. The financial statements contained the following errors: 2018 2019 Ending Inventory 160,000 understated 150,000 overstated Depreciation expense 60,000 understated Insurance expense 100,000 overstated 100,000 understated Prepaid Insurance 100,000 understated On December 31, 2019, fully depreciated machinery was sold for P108,000 cash but the sale was not recorded until 2020. No corrections have been made for any of the errors