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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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