At December 31, 2019, Patricia Johnson Corporation reported current assets of $404,870 and current liabilities of $197,500. The following items may have been recorded incorrectly.

1.		Goods purchased costing $21,690 were shipped f.o.b. shipping point by a supplier on December 28. Johnson received and recorded the invoice on December 29, 2019, but the goods were not included in Johnson’s physical count of inventory because they were not received until January 4, 2020.
2.		Goods purchased costing $14,050 were shipped f.o.b. destination by a supplier on December 26. Johnson received and recorded the invoice on December 31, but the goods were not included in Johnson’s 2019 physical count of inventory because they were not received until January 2, 2020.
3.		Goods held on consignment from Claudia Kishi Company were included in Johnson’s December 31, 2019, physical count of inventory at $14,100.

Compute the current ratio based on Johnson’s balance sheet. (Round ratio to 2 decimal places, e.g. 2.31:1.)

The current ratio

enter the current ratio rounded to 2 decimal places ______

:1

Recompute the current ratio after corrections are made. (Round ratio to 2 decimal places, e.g. 2.31:1.)

The current ratio

enter the current ratio rounded to 2 decimal places ______

:1

By what amount will income (before taxes) be adjusted up or down as a result of the corrections?

Adjust Income