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he before-tax income for Metlock Co. for 2025 was $94,000 and $84,300 for 2026 . However, the accountant noted that the ollowing errors had been
he before-tax income for Metlock Co. for 2025 was $94,000 and $84,300 for 2026 . However, the accountant noted that the ollowing errors had been made: 1. Sales for 2025 included amounts of $35,000 which had been received in cash during 2025 , but for which the related products were delivered in 2026. Title did not pass to the purchaser until 2026. 2. The inventory on December 31,2025 , was understated by $8,600. 3. The bookkeeper in recording interest expense for both 2025 and 2026 on bonds payable made the following entry on an annual basis. Interest Expense 15,000 Cash 15,000 The bonds have a face value of $250,000 and pay a stated interest rate of 6%. They were issued at a discount of $14,000 on January 1,2025, to yield an effective-interest rate of 7%. (Assume that the effective-interest method should be used.) 4. Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2025 and 2026. Repairs in the amount of $8,200 in 2025 and $9.200 in 2026 were so charged. The company applies a rate of 10% to the balance in the Equipment account at the end of the ycar in its determination of depreciation charges. Prepare a schedule showing the determination of corrected income before taxes for 2025 and 2026. (Enter negative amounts using either a negative sign preceding the number es. 15,000 or parentheses es. (15,000). Round answers to 0 decimal places, es. 125.)
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