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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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A review of Anderson Corporation’s books indicates that the errors and omissions pertaining to the balance sheet accounts shown as follows had not been corrected during the applicable years.

The net income per the books is: 2017, $10,000; 2018, $12,000; 2019, $15,000; and 2020, $20,000. No dividends were declared during these years and no adjustments were made to retained earnings. The Retained Earnings balance on December 31, 2020, is $50,000.

Omissions

Chapter 22, Problem 11P, A review of Anderson Corporations books indicates that the errors and omissions pertaining to the

Required:

Determine the correct net income for the years 2017, 2018, 2019, and 2020, and the adjusted balance sheet accounts as of December 31, 2020. Ignore possible income tax effects.

To determine

Compute the correct net income for the years 2017, 2018, 2019, and 2020, after the errors are corrected.

Explanation

Errors: The comparability and consistency of the financial statements decreases when a company records arithmetic mistakes, or errors. Such errors do require adjustments to make the financial information more reliable, and more relevant...

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