Answered: BLACK WIDOW Corporation failed to…

BLACK WIDOW Corporation failed to recognize accruals and prepayments since the inception of its business three years ago. The accruals and prepayments at the end of 2021 are as follows:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

4. What is the net effect of the above errors in the 2021 net income? (If understated, put a negative (-) sign before the numerical value)

BLACK WIDOW Corporation failed to recognize accruals and prepayments since the inception of
its business three years ago. The accruals and prepayments at the end of 2021 are as follows:
℗ 25,000
Unused office supplies
Accrued utilities
52,000
Rent revenue collected in advance
87,500
Interest receivable
65,500
Accrued wages
49,100
Prepaid insurance
60,000

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