PROBLEM 1

Kassanight Co. reported the following Net Income: 2016 400,000 2017 200,000 2018 550,000 The following are the misstatements discovered in 2019. 2016 Inventory Overstated 15,000 2017 Inventory Understated 28,000 2018 Inventory Understated 35,000 2017 Accrued Salaries Understated 5,000 Advanced Rent Payments for 2019 recorded in 2018 rent expense 7,000 2016 Depreciation not yet recorded 25,000 Payment for Insurance in 2016 covering 3-year period was fully expensed in 2016 45,000 Fully Depreciated Equipment Sold in 2018 but recorded in 2019 27,000