Cullumber Inc. began operations on January 1, 2022. Financial statements for 2022 and 2023 contained the following errors: Dec. 31, 2022 Dec. 31, 2023 Ending inventory $32500 too high $41000 too low Depreciation 23000 too high expense Insurance expense 14000 too low 14000 too high Prepaid insurance 14000 too high In addition, on December 31, 2023 fully depreciated equipment was sold for $8600, but the sale was NOT recorded until 2024. No corrections have been made for any of the errors. Ignore income tax considerations. The total effect of the errors on Cullumber's 2023 net income is O understated by $96100. overstated by $27900. O understated by $63600. O overstated by $50900.

Cullumber Inc. began operations on January 1, 2022. Financial statements for 2022 and 2023 contained the following errors: Dec. 31, 2022 Dec. 31, 2023 Ending inventory $32500 too high $41000 too low Depreciation 23000 too high expense Insurance expense 14000 too low 14000 too high Prepaid insurance 14000 too high In addition, on December 31, 2023 fully depreciated equipment was sold for $8600, but the sale was NOT recorded until 2024. No corrections have been made for any of the errors. Ignore income tax considerations. The total effect of the errors on Cullumber's 2023 net income is O understated by $96100. overstated by $27900. O understated by $63600. O overstated by $50900.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 13PA: Company Elmira reported the following cost of goods sold but later realized that an error had been...

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