Question
Show how the following independent errors will affect Net Income on the Income Statement and the Stockholders' Equity section of the Balance Sheet using the
Show how the following independent errors will affect Net Income on the Income Statement and the Stockholders' Equity section of the Balance Sheet using the following abbreviations: O = Overstated; U = Understated; NE = No Effect. Complete the schedule on the answer sheet for each item below:
1. Ending inventory in 2014 overstated.
2. A capital expenditure for factory equipment (useful life, 5 years) was erroneously charged to Maintenance Expense in 2014.
3. Failed to accrue 2014 wages. The wages were paid in 2015 and recognized as expense at that time.
2014 Income SE Sect. of Statement Bal Sheet 2015 Income SE Sect of Statement Bal SheetStep by Step Solution
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