You work as a Senior Auditor for PricewaterhouseCoopers and have been assigned to the 2020 audit of Jakarta Limited. The company is a dining table manufacturer based in High River, Alberta.

You notice that net income for the company has increased gradually over the past few years: - 2017: $535,000 - 2018: $615,000 - 2019: $735,000

You also notice the following errors have occurred in prior years: -

2017: Understatement of beginning inventory: $50,000 Overstatement of accrued administrative expenses: $12,000 -

2018: Understatement of beginning inventory: $60,000 Overstatement of accrued administrative expenses: $16,000 -

2019: Understatement of beginning inventory: $40,000 Overstatement of accrued administrative expenses: $10,000

(a) Calculate the correct net incomes for each of the three prior years.

(b) Ignoring any income tax effects, prepare the journal entry in good form for 2020 to fix the errors.