The before-tax income forSandhillCo. for 2020 was $95,000and $71,200for 2021. However, the accountant noted that the following errors had been made:

1.Sales for 2020 included amounts of $41,000which had been received in cash during 2020, but for which the related products were delivered in 2021. Title did not pass to the purchaser until 2021.2.The inventory on December 31, 2020, was understated by $8,300.3.The bookkeeper in recording interest expense for both 2020 and 2021 on bonds payable made the following entry on an annual basis.

Interest Expense

13,800

Cash

13,800

The bonds have a face value of $230,000and pay a stated interest rate of6%. They were issued at a discount of $14,000on January 1, 2020, to yield an effective-interest rate of7%. (Assume that the effective-yield method should be used.)

4.Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2020 and 2021. Repairs in the amount of $8,900in 2020 and $10,100in 2021 were so charged. The company applies a rate of10% to the balance in the Equipment account at the end of the year in its determination of depreciation charges.

A schedule showing the determination of corrected income before taxes for 2020 and 2021.(Enter negative amounts using either a negative sign preceding the number e.g. -15,000 or parentheses e.g. (15,000). Round answers to 0 decimal places, e.g. 125.)

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