The before-tax income for Hawks Corp. for 2019 was $104,600; for 2020, it was $79,800. However, the accountant noted that the

following errors had been made:

Sales for 2019 included $39.200 that had been received in cash during 2019, but for which the related products were

delivered in 2020. Title did not pass to the purchaser until 2020.

Ending inventory on December 31, 2019, was understated by $8,750. The December 31, 2020 ending inventory has not yet

been adjusted to the Inventory account. Assume that Hawks has a periodic inventory system and that no adjustment has

been made to the opening balance of the Inventory account.

The bookkeeper, in recording interest expense for both 2019 and 2020 on bonds payable, made the following entry each

year:

Interest Expense

15.000

Cash

15.000

The bonds have a face value of $250,000 and pay a stated interest rate of 6%. They were issued at a discount of $5.000 on

January 1, 2019, to yield an effective interest rate of 7%. (Use the effective interest method.)

Ordinary repairs to equipment had been charged in error to the Equipment account during 2019 and 2020. In total, repairs

in the amount of $8,900 in 2019 and $9,400 in 2020 were charged in this way. The company uses the declining balance

method and applies a rate of 10% in determining its depreciation charges.

Assume that Hawks Corp. applies IFRS.

(a)

Prepare a schedule showing the calculation of corrected income before tax for 2019 and 2020. (Enter negative amounts using either

a negative sign preceding the number eg. -45 or parentheses eg. (45). Round answers to 0 decimal places, e.g. 5,125.)

2. The journal entries that the company's accountant would prepare in 2020, assuming the errors are discovered while the 2020 books are still open. Ignore income tax effects.