12. Casillas, Inc. is a calendar-year corporation. Its financial statements for the years 2011 and 2010 contained errors as follows: 2010 Ending Inventory$3,000 overstated$8,000 overstated $2,000 understated$6,000 overstated 2011 Depreciation Expense Assume that no correcting entries were made at December 31, 2010, or December 31, 2011 and that no additional errors occurred in 2012. Ignoring income taxes, by how much will working capital at December 31, 2012 be overstated or understated? a. $0 b. $2,000 overstated c. $2,000 understated d. $5,000 understated

Willamill Company showed pre-tax income of P2,500,000 for the year ended December 31, 2025. On your year-end verification of the transactions of the Company, you discovered the following errors: P1,000,000 worth of merchandise was purchased in 2025 and included in the ending inventory. However, the purchase was recorded only in 2026. A merchandise shipment valued at P1,500,000 was properly recorded as purchases at year-end. The merchandise was inadvertently omitted from the physical count, since it has not arrived by December 31, 2025. Value added tax for the fourth quarter of 2025, amounting to P500,000 was included in the Sales account. Rental of P300,000 on an equipment, applicable for six months, was received on November 1, 2025. The entire amount was reported as revenue upon receipt. Rent paid on building covering the period from July 1, 2025 to July 1, 2026, amounting to P1,200,000, was paid and recorded as expense on July 1, 2025. The company did not make any adjustment at the…

Company X failed to record (accrue) $5,000,000 of vendor invoices and warranty liability at year-end. As a result of this omission, the company's summary financial statements were stated as follows: Summarized Income Statement Sales                                             $50,000,000 All Cost (incl. Interest & Taxes)    $40,000,000 Net Income                                   $10,000,000 Summarized Balance Sheet                                                       This Year               Last Year Assets: All Current Assets combined           $50,000,000       $40,000,000  All Long-Term Assets combined      $50,000,000        $40,000,000  Total Assets:                                   $100,000,000       $80,000,000  Liabilities & Stockholders Equity All Current Liabilities combined         $30,000,000      $25,000,000 All Long-Term Liabilities combined   $25,000,000      $20,000,000 Stockholders Equity                          $45,000,000       $35,000,000 Total…

During 20x3, Pryor Company changed its inventory method from the LIFO to FIFO. The beginning inventory under FIFO is $20,000 higher than under LIFO. Prepare the journal entry to record this accounting change. Ignore income tax.