Problem 22-8 On March 5, 2018, you were hired by Whispering Inc aclosely held company, as a staff member of its newly created internal auditing department. While reviewing the company's records for 2016 and 2017 you discover that no adjustments have yat been made for the itens listed below. Items Interest income of 13,500 was not accrued at thc end of 2016. It wos recorded whon receivod in Fcbruary 2017 1. A computer costing $3,840 was expensed when purchased on July 1, 2016. It is expected to have a 4-year life with no salvage value. The company typically uses straight-line depreciation for all fixed assats. 2. 3. Research and development costs of $35,400 were incurred early in 2016. They were capitalized and were to be amortized over a 3-year period. Amortization of $11,800 was recorded for 2016 and $11.800 for 2017 On January 2. 2016, Whispering leased a building for 5 years at a monthly rental of $8,800. On that date, the company paid the following amounts, which were expensed when paid. 4. Security deposit 20,000 First month's rent 8,800 Last month's rent 8,800 $37,600 5. The company received $39,600 from a customer at the beginning of 2016 for services that it is to perform evenly over a 3-year period beginning in 2016. None of the amount received was reported as unearned revenue at the end of 2016. Merchandise inventory costing $17,600 was in the warehouse at December 31, 2016, but was incorrectly omitted from the physical count at that date. The company uses the periodic inventory method 6. Indicate the affact of any errors on the nat income figure roported on the income statemant for the year anding Dacembar 31, 2016, and the ratained earnings figure reported on tha balance shoat at Dacember 31, 2017. Assume all amounts are material, and ignore income tax offects. 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 Net Income for 2016 1. 2. 3. December 31, 2017. Assu e al mounts 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 Net Income for 2016 Item