Cannon Company began operations on January 1, 2019. The financial statements contained the following errors:

2019 2020

Ending inventory 160,000 overstated 100,000 understated

Depreciation expense 50,000 understated

Insurance expense 100,000 understated 200,000 overstated

Prepaid insurance 80,000 overstated 50,000 overstated

Unearned income 20,000 understated 50,000 oversated

Interest income 10,000 overstated

Additional information:

In 2019, a fully depreciated equipment was sold at P100,000. The equipment has an original cost of P500,000. The transaction was credited to Sales.

In 2019, a shipment received by the Cannon Company from a vendor worth P200,000 was not recorded.

In 2020, a credit from a customer worth P500,000 was not recorded by Cannon Company.

At the end of 2020, Cannon Company overlooked the recording of doubtful accounts at P100,000.

Required:

1. Compute for the net effect of errors to the net income or loss for 2019.
2. Compute for the net effect of errors to the net income or loss for 2020.
3. Compute the net effect of errors to the retained earnings as of December 31, 2020.
4. Compute for the net effect of errors to the working capital on December 31, 2020.