1. Eagle Corp. is a calendar-year corporation whose financial statements for 2019 and 2020 included errors as follows:

	Year	Ending Inventory	Depreciation Expense
	2019	$36,000 overstated	$30,000 overstated
	2020	12,000 understated	10,000 understated

Assume that purchases were recorded correctly and that no correcting entries were made at December 31, 2019 or December 31, 2020. Ignoring income taxes, by how much should Eagle's retained earnings be retrospectively adjusted at January 1, 2021?

A) $4000 decrease 

B) $8000 increase 

C) $2000 increase 

D) $32,000 increase

2.

 

3. The cash provided by (used in) financing activities for 2020 was (related to question above)

$(250,000).

$12,500.

$100,000.

$(225,000).

 

Casio adheres to ASPE. Casio Corp.'s transactions for the year ended December 31, 2020 included the following: 1. Purchased land for $275,000 cash. 2. Borrowed $275,000 from the bank on a long-term note. 3. Sold long-term investments for $250,000. 4. Accounts receivable decreased by $50,000. 5. Paid cash dividends of $300,000. 6. Issued 1,000 common shares for $125,000. 7. Purchased machinery and equipment for $62,500 cash. 8. Accounts payable increased by $100,000. The cash used in investing activities for 2020 was O $(337,500). $(25,000). O $(187,500). $(87,500).