Blue Co. has a patent on a communication process. The company has amortized the patent on a
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/06/666c17fab248f_058666c17fa9de2a.jpg)
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$14.44 million.
$7.22 million.
$28.89 million.
$5.78 million.
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$28,667.
$18,634.
$19,350.
$21,500.
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$160,000.
$320,000.
$3,680,000.
$480,000.
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If undetected, what is the effect of this error on Berkshire's 12/31/2015 balance sheet? |
Assets understated by $600,000 and shareholders' equity understated by $600,000.
Assets understated by $390,000 and shareholders' equity understated by $390,000.
Assets understated by $600,000, liabilities understated by $210,000 and shareholders' equity understated by $390,000.
None of the above is correct.
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Ending inventory, December 31, 2016, understated by $6,000 |
Depreciation expense for 2016 overstated by $1,900 |
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What is the effect of the errors on 2016 net income before taxes? |
Understated by $4,100.
Overstated by $7,900.
Overstated by $4,100.
Understated by $7,900.
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2014: | Ending inventory was overstated by $57,000 while depreciation expense was overstated by $25,300 |
2015: | Ending inventory was understated by $14,000 while depreciation expense was understated by $5,400. |
By how much should retained earnings be adjusted on January 1, 2016? (Ignore taxes) |
Increase by $33,900.
Decrease by $33,900.
Decrease by $31,900.
Increase by $43,000.
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Understated by $16.25 million.
Understated by $8.75 million.
Understated by $25.00 million.
Unaffected.
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Understated by $18.90 million.
Understated by $27.00 million.
Understated by $8.10 million.
Unaffected.
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Understated by $84,000.
Understated by $156,000.
Overstated by $84,000.
Overstated by $156,000.
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Report a prior period adjustment decreasing retained earnings by $1,680,000.
Report a prior period adjustment decreasing retained earnings by $1,120,000.
Report a current period charge decreasing net income by $1,680,000.
Report a current period charge decreasing net income by $1,120,000.
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Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas