You have been assigned to examine the financial statements of Mari, Inc. for the year ended December 31, 2023. You discover the following situations in February 2024.

1. On December 31, 2023, Mari, Inc. decided to change the depreciation method on its machinery from double-declining-balance to straight-line. The Machinery had an original cost of $100,000 when purchased on January 2, 2022. It has a 10-year useful life and $5,300 salvage value. Depreciation expense recorded prior to 2023 under the double-declining-balance method was $20,000. Mari, Inc. has already recorded 2023 depreciation expense of $16,000.
2. The physical inventory count has been incorrectly counted resulting in the following errors.

December 2021 Overstated $7,600

December 2022 Understated $5,200

December 2023 Overstated $5,600

Instructions

1. Assume the trial balance has been prepared but the books HAVE NOT been closed for 2023. Assuming all amounts are material, prepare journal entries showing the adjustments that are required. (Ignore income tax considerations).
2. Assume the trial balance has been prepared but the books HAVE been closed for 2023. Assuming all amounts are material, prepare journal entries showing the adjustments that are required. (Ignore income tax considerations).
3. Prepare a schedule correcting net incomes for 2021, 2022 and 2023 assuming the books HAVE NOT been closed for 2023.