Wildhorse Tool Corporation's December 31 year-end financial statements contained the following errors: December 31, 2022 December 31, 2023 Ending inventory $10,900 overstated $10,200 understated Depreciation expense $3,500 overstated An insurance premium of $50,400 covering the years 2022, 2023, and 2024 was prepaid in 2022, with the entire amount charged to expense that year. In addition, on December 31, 2023, fully depreciated machinery was sold for $15,400 cash, but the entry was not recorded until 2024. There were no other errors during 2022 or 2023, and no corrections have been made for any of the errors. Wildhorse follows ASPE. Answer the following, ignoring income tax considerations. (a) Calculate the total effect of the errors on 2023 net income. Effect of errors on 2023 net income: $
Wildhorse Tool Corporation's December 31 year-end financial statements contained the following errors: December 31, 2022 December 31, 2023 Ending inventory $10,900 overstated $10,200 understated Depreciation expense $3,500 overstated An insurance premium of $50,400 covering the years 2022, 2023, and 2024 was prepaid in 2022, with the entire amount charged to expense that year. In addition, on December 31, 2023, fully depreciated machinery was sold for $15,400 cash, but the entry was not recorded until 2024. There were no other errors during 2022 or 2023, and no corrections have been made for any of the errors. Wildhorse follows ASPE. Answer the following, ignoring income tax considerations. (a) Calculate the total effect of the errors on 2023 net income. Effect of errors on 2023 net income: $
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 10MC: Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended...
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