Question
During 2024, Lipe and Lipe Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts: 2022 understated by
During 2024, Lipe and Lipe Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts:
| 2022 | understated by | $ 130,000 |
|---|---|---|
| 2023 | overstated by | 170,000 |
Lipe and Lipe uses the periodic inventory system and the FIFO cost method.
Required:
1-a. Determine the effect of 2022 errors on retained earnings at January 1, 2024, before any adjustments. (Ignore income taxes.)
1-b. Determine the effect of 2023 errors on retained earnings at January 1, 2024, before any adjustments. (Ignore income taxes.)
2. Prepare a journal entry to correct the error in 2024.
3. Will Lipe and Lipe account for the error (a) retrospectively or (b) prospectively?
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Human Resources Audit Analysis Of And Collective Staff Performance
Authors: Hassani Moindjie MLIMI
1st Edition
6203356999, 978-6203356991
