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Straightarm Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/24 and 12/31/25 contained the following errors: 2024 2025 Ending inventory $15,000
Straightarm Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/24 and 12/31/25 contained the following errors:
2024 | 2025 | |
Ending inventory | $15,000 understatement | $24,000 overstatement |
Depreciation expense | $6,000 understatement | $12,000 understatement |
- Failed to record Unearned Revenue at 12/31/25: $7,000
- Straightarm declared a cash dividend of $11,000 on 12/31/25. No journal entry was made in 2025. The dividend was paid on 1/3/26; Straightarm debited Retained Earnings and credited Cash.
12/31/26 Working Capital is in error by:
Select one:
a. No Error
b. $18,000
c. $29,000
d. $7,000
e. $31,000
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