Henson company had determined the 2019 and 2020 net income to be 4,000,000 and 5,000,000 respectively. In a first time audit of the financial statements, the following errors are discovered: Merchandise inventory was incorrectly determined - 50,000 overstatement for 2019 and 150,000 overstatement for 2020 Revenues received in advance in 2019 of 300,000 was credited to be a revenue account when received. Of the total 50,000 was earned in 2019, 200,000 was earned in 2020 and the remainder will be earned in 2021. 400,000 gain on sale of plant asset in 2020 was erroneously credited to retained earnings. What is the corrected net income for 2020? a. 5,500,000 b.5,450,000 c.5,400,000 d.5,550,000

In 2016, the controller of Sytec Corporation discovered that $42,000 of inventory purchases were incorrectly charged to advertising expense in 2015. In addition, the 2015 year-end inventory count failed to include $30,000 of company merchandise held on consignment by Erin Brothers. Sytec uses a periodic inventory system. Other than the omission of the merchandise on consignment, the year-end inventory count was correct. The amounts of the errors are deemed to be material. Required: 1. Determine the effect of the errors on retained earnings at January 1, 2016. Explain your answer. (Ignore income taxes.) 2. Prepare a journal entry to correct the errors. 3. What other step(s) would be taken in connection with the correction of the errors?

You have been hired as the new controller for the Ralston Company. Shortly after joining the company in 2021, you discover the following errors related to the 2019 and 2020 financial statements: Inventory at December 31, 2019, was understated by $6,100. Inventory at December 31, 2020, was overstated by $9,100. On December 31, 2020, inventory was purchased for $3,100. The company did not record the purchase until the inventory was paid for early in 2021. At that time, the purchase was recorded by a debit to purchases and a credit to cash. The company uses a periodic inventory system.Required:1. Assuming that the errors were discovered after the 2020 financial statements were issued, analyze the effect of the errors on 2020 and 2019 cost of goods sold, net income, and retained earnings. (Ignore income taxes.)2. Prepare a journal entry to correct the errors.

Assume that in an annual audit of Pharoah Inc. at December 31, 2020, you find the following transactions near the closing date.Assuming that each of the amounts is material, state whether the merchandise should be included in the client’s inventory.     Transactions     1.   A special machine, fabricated to order for a customer, was finished and specifically segregated in the back part of the shipping room on December 31, 2020. The customer was billed on that date and the machine excluded from inventory although it was shipped on January 4, 2021.   select an option                                                           IncludeDo not include 2.   Merchandise costing $5,180 was received on January 3, 2021, and the related purchase invoice recorded January 5. The invoice showed the shipment was made on December 29, 2020, f.o.b. destination.   select an option                                                           IncludeDo not include 3.   A packing case containing a…

Vader Corporation made two errors in counting inventory: Ending inventory for 2019 was overstated by $15,000, and ending inventory for 2020 was understated by $12,000. If neither error was corrected, what will be the error (before taxes) in 2020 net income? a.Overstated $27,000. b.Understated $27,000. c.Overstated $3,000. d.Understated $3,000.

Honey Crunch Limited started business in 2018. It is now 2021 and the Board ofDirectors of Honey Crunch Limited hired Aegis Solutions to recommend howeach of the following types of accounting changes or errors should be dealt with.  The company changed its method of inventory pricing from FIFO toAverage Cost in 2020. The change was made from 2020 onwards. Just tosee the impact, the company also did an analysis of the change for theprevious years As an audit assistant for Aegis, provide Honey Crunch with this information. Foreach issue write a note for the audit file (3-5 sentences) identify the type ofaccounting change or error, the appropriate accounting treatment, includeamounts where applicable and how net income would be impacted if the issueneeds correcting

The following errors were discovered in the preparation of the financial statements of Uni-Focus Company for the year ended November 30, 2021. Goods held on consignment from Tri-Facet Ltd. with a cost of $17,940 were incorrectly included in Uni-Focus Company’s inventory on November 30, 2020.  The goods were not sold during the 2021 year and were returned to Tri-Facet.  The goods were not included in Uni-Focus Company’s November 30, 2021 inventory count.  Assume that Uni-Focus Company’s Inventory account accurately reflects the results of the November 30, 2021 count. During the first week of December 2017, office furniture was purchased for $18,505.  The entire purchase was recorded with a debit to Office Supplies Expense, and a credit to Cash.  Uni-Focus expected to keep the furniture for 10 years and sell it for $675 at the end of the asset’s useful life.  Uni-Focus Company uses the straight-line method of depreciation for furniture. On December 1, 2019, Uni-Focus Company paid an…

In 2016, the internal auditors of Development Technologies, Inc. discovered that a $4 million purchase of merchandise in 2016 was recorded in 2015 instead. The physical inventory count at the end of 2015 was correct. Required: Prepare the journal entry needed in 2016 to correct the error. Also, briefly describe any other measures Development Technologies would take in connection with correcting the error. (Ignore income taxes.)

Subject - account  Please help me.  Thankyou.

6. You wil PROBLEM: Net income for Victory Company for the years 2021 and 2022 is shown below. An audit of the accounts, however, disclosed the following errors: 2021 2022 Net income after income tax 246,500 312.500 Understatement of year-end inventory 25.000 Purchase of computer at year cnd charged to expense. The estimated useful life is 10 years. 40,000 Credit purchases of merchandise not recorded but included in the physical count at year end 50,000 Rent received in advance and credited to incomne 18.000 Unrecorded unpaid taxes at year-end, 20.000 QUESTIONS: 1. What is the correct net income for the year 2021? 2. What is the correct net income for the year 2022?