On March 5, 2015, you were hired by Hemingway Inc., a closely held company, as a staff member of its newly created internal auditing department. While reviewing the company's records for 2013 and 2014, you discover that no adjustments have yet been made for the items listed below

Items:

1) interest income of 14,000$ AND was not accrued at the end of 2015. it was recorded when received in Feb 2014.

2) A computer purchase was at 4,000$ was expensed at July, 1, 2013. It is expected to have a 4 year life wo salvage value. We use straight line depreciation on all fixed assets.

3) R and D costs of 33,000 was incurred in 2013.they were capitalized and were to amortized over a three year period. Amortization was was 11,000$ in 2013 and 11,000$ in 2014.

4) January 2, 2013 they leased a building for five years paying 8,000 monthly.

Security deposit 20,000$

first month rent 8,000$

last month rent 8,000$

5) The company received 36,000$ from a customer in the beginning of 2013 for services preformed evenly over the next three years starting in 2013. Amount received was reported as unearned revenue.

6) Merchandise inventory cost 18,200$ was in the warehouse at December 31,2013 but was incorrectly omitted from the physical count date. The company used the periodic inventory method.

Instructions:

Indicate the effect of any errors on the net income figure reported on the income statement for the year ending December 31, 2013, and the retained earnings figure reported on the balance sheet at December 31, 2014. Assume all amounts are material, and ignore income tax effects. Using the following format, enter the appropriate dollar amounts in the appropriate columns. Consider each item independent of the other items. It is not necessary to total the columns on the grid. I need the work to be shown please!!!

Thanks