Financial Accounting

Part III (5 points) (During 2012 the company discovered the following account errors 1- In July 1 2015, XYZ corporation Acquired an equipment 15at cost of $30000 the estimated useful life for the machine 5 years and the residual value zero However, company failed to record depreciation since the date of acquisition in 2015. 2- Ending inventory for year 2015 was understated by $ 2000. 3- Ending inventory for year 2916 was overstated by $1500. 4- Accountant failed to record unrealized loss on non- trading securities of $1500 of year 2016. company subject to income tax rate 40% and use the SYD to depreciateequipment. Required : Show the dollar amount of the combined effect, if any, and the nature of the effect (overstatement or understatement or correct) of these accounting errors on the reporting value of the following financial statement items as in the following table: (use table in the answer sheet) F S items the combined impact on reporting value of FS items NI 2015 Total Assets Dec. 31 2016 Owners Equity Dec. 31 2016 Total liability 2016 Comprehensive Income 2016 b) By making reference to the conceptual framewiork of accounting, which accounting principle(s) is (are) violated or accounting quality undermined as result of these errors