Below is the income statement of Oscar & Kyra Co. for the year ended December 31, 2021: Sales $100,000 Cost of Goods Sold $60,000 Gross Income $40,000 Operating Expenses $15,000 Net Income $25,000 The following errors were seen: 1.) Accrued expenses of $400, prepaid expenses of $600 were not recognized in the company's books. The company employs the expense method in accounting for prepayments. 2.) Sales of $500 were not recorded until January 2022, although the goods were shipped on December 31, 2021, and were excluded from the December 31 physical inventory. 3.) December 31, 2021-Inventory is understated by $3,100. 4.) Purchases of $3,000 made on December 31, 2021 were not recorded although the goods were received and properly included in the December 31 physical inventory. 5.) A machine was sold for $1,000 on July 1, 2021. The proceeds were credited to the Sales account. The machine was acquired on January 1, 2018 for $6,000 with an estimated life of 6 years with no residual value. No depreciation was recorded on this asset in 2021. What is the corrected net income for the year ended December 31, 2021?
Below is the income statement of Oscar & Kyra Co. for the year ended December 31, 2021:
| Sales | $100,000 |
| Cost of Goods Sold | $60,000 |
| Gross Income | $40,000 |
| Operating Expenses | $15,000 |
| Net Income | $25,000 |
The following errors were seen:
1.) Accrued expenses of $400, prepaid expenses of $600 were not recognized in the company's books. The company employs the expense method in accounting for prepayments.
2.) Sales of $500 were not recorded until January 2022, although the goods were shipped on December 31, 2021, and were excluded from the December 31 physical inventory.
3.) December 31, 2021-Inventory is understated by $3,100.
4.) Purchases of $3,000 made on December 31, 2021 were not recorded although the goods were received and properly included in the December 31 physical inventory.
5.) A machine was sold for $1,000 on July 1, 2021. The proceeds were credited to the Sales account. The machine was acquired on January 1, 2018 for $6,000 with an estimated life of 6 years with no residual value. No
What is the corrected net income for the year ended December 31, 2021?
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