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The before-tax income for Marigold Co, for 2025 was $98,000 and $80,300 for 2026 . However, the accountant noted that the following errors had been
The before-tax income for Marigold Co, for 2025 was $98,000 and $80,300 for 2026 . However, the accountant noted that the following errors had been made: 1. Sales for 2025 included amounts of $41.300 which had been received in cash during 2025 , but for which the related products were delivered in 2026 . Title did not pass to the purchaser unti 2026. 2. The inventory on December 31,2025 , was understated by $7,800. 3. The bookkeeper in recording interest expense for both 2025 and 2026 on bonds payable made the following entry on an annual basis. Interest Expense 18,200 Cash 18,200 The bonds have a face value of $260,000 and pay a stated interest rate of 7%. They were issued at a discount of $14.000 on January 1. 2025, to yicld an effective-interest rate of 8%. (Assume that the effective-interest method should be used.) 4. Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2025 and 2026. Repairs in the amount of $8,200 in 2025 and $9,300 in 2026 were so charged. The compary applies a rate of 10% to the balance in the Equipment account at the end of the year in its determination of depreciation charges: Corrections: Corrected Income before Tax
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