$\backslash$table$[[$Question $11$ Partially correct Mark $0\mathrm{.}58$ out of $0\mathrm{.}63,$ P Flagquestion$]]$

Recording and Reporting an Error, Comparative Statements

Beckham Corporation had never been audited before December $31$ of Year $4,$ the current year. Before the arrival of the auditors, the controller prepared comparative financial statements showing the results of Year $3$ and Year $4.$ The accounts for Year $4$ have not been closed. The auditors discovered that an invoice dated January of Year $1$ for $$13,500($paid in cash at the time$)$ was debited to Year $1$ operating expenses, although it was for the purchase of equipment. The efipment has an estimated useful life of $10$ years and no estimated residual value.

Reported income on the financial statements prepared by the company $($before discovery of the error$)$ was Year $1,$ $$16,500$; Year $2,$ $$33,000$; Year $3,$$$45,000$; and Year $4,$ $$49,500.$ Disregard income tax considerations and assume that Beckham uses straight$-$line depreciation.

Required

a$.$ Determine the correct net income for Year $1,$ Year $2,$ Year $3,$ and Year $4.$

b$.$ Prepare the Year $4$ entries to record the $(1)$ correction of the Year $1$ error and $(2)$ depreciation expense for Year $4.$

c$.$ Show how the correction is reported on the Year $4$ comparative balance sheet, the Year $4$ statement of retained earnings, and the Year $4$ income statement. Include a proper note disclosure.

Note: Do not use negative signs with your answers.