Joseph Co. began operations on January 1, 2012. Financial statements for 2012 and 2013 contained the following errors:

Dec. 31, 2012 Dec. 31, 2013

Ending inventory $80,000 too high $114,000 too high

Depreciation expense 48,000 too low

Accumulated depreciation 48,000 too low 48,000 too low

Insurance expense 42,000 too high 42,000 too low

Prepaid insurance 36,000 too low

In addition, on December 26, 2013 fully depreciated equipment was sold for $53,000, but the sale was not recorded until 2014. No corrections have been made for any of the errors.

Instructions

Ignoring income taxes, show your calculation of the total effect of the errors on 2013 net income