Solve the following.

PROBLEM 1 SADIE Company is in the process of adjusting its books at the end of 2022. Sadie records revealed the following information: a} Sadie failed to accme sales commissions at the end of 2020 and 2021 as follows: 2020 P220. 000 2021 P140. 000 In each case. the sales commissions were paid and expensed in January of the following year. b} Errors in ending inventory for the last three years were discovered to be as follows: 2020 P400. 000 understated 2021 P540. 000 overstated 2022 P150. 000 understated The unadjusted retained earnings balance on January 1. 2022. is P12. 600. 000 and the unadjusted net income for 2022 was P3. 000. 000. Dividends of P1. T50. 000 were declared during 2022. Determine the following: 1. Overstatement (understatement) of 2021 net income 2. The adjusted net income in 2022 3. The adjusted balance of retained earnings on December 31. 2022