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What is the effect of the errors to the Retained Earnings at the beginning of 2019? * 400,000 410,000 415,000 420,000

What is the effect of the errors to the Retained Earnings at the beginning of 2019? * 400,000 410,000 415,000 420,000

FINANCIAL ACCOUNTING
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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What is the effect of the errors to the Retained Earnings at the beginning of 2019? *

400,000

410,000

415,000

420,000

You have been engaged to audit the accounts of Justine Corporation for the first time in 2019. During the audit, you discovered the following information: 2018 2019 The following were omitted at each year end: Salaries Payable 12,000 5,000 Accrued Interest Income 4,000 3,000 Unearned Rental Income 14,000 15,000 Prepaid Insurance 3,000 5,000 Collections from customers at year-end, recorded as sales but deliveries were not made until the following year Payments to suppliers at year-end, recorded as purchases but merchandise were not received until the following year Overstated Depreciation Recorded Ordinary Repairs Expense capitalized at a depreciation rate of 10% Unadjusted Net Income 31,000 25,000 60,000 80,000 20,000 500,000 200,000 245,000 310,000
Transcribed Image Text:You have been engaged to audit the accounts of Justine Corporation for the first time in 2019. During the audit, you discovered the following information: 2018 2019 The following were omitted at each year end: Salaries Payable 12,000 5,000 Accrued Interest Income 4,000 3,000 Unearned Rental Income 14,000 15,000 Prepaid Insurance 3,000 5,000 Collections from customers at year-end, recorded as sales but deliveries were not made until the following year Payments to suppliers at year-end, recorded as purchases but merchandise were not received until the following year Overstated Depreciation Recorded Ordinary Repairs Expense capitalized at a depreciation rate of 10% Unadjusted Net Income 31,000 25,000 60,000 80,000 20,000 500,000 200,000 245,000 310,000
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