22 Net income for Victory Company for the years 2021 and 2022 is shown below. Anaudit of the accounts, however, disclosed the following errors:20212022Net income after income tax246,500 312,500Understatement of year-end inventory25,000Purchase of computer at year end charged toexpense. The estimated useful life is 1040,000years.Credit purchases of merchandise notrecorded but included in the physical count at 50,000year endRent received in advance and credited toincome18,000Unrecorded unpaid taxes at year-end20,000QUESTIONS:1. What is the correct net income for the year 2021?2. What is the correct net income for the year 2022?

1. As it is mentioned in the question that Year End Inventory is understated by 25000 for the year…

Answered: 1. What is the correct net income for…

Business

Accounting

1. What is the correct net income for the year 2021? 2. What is the correct net income for the year 2022?

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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Concept explainers

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.

Question

Net income for Victory Company for the years 2021 and 2022 is shown below. An
audit of the accounts, however, disclosed the following errors:
2021
2022
Net income after income tax
246,500 312,500
Understatement of year-end inventory
25,000
Purchase of computer at year end charged to
expense. The estimated useful life is 10
40,000
years.
Credit purchases of merchandise not
recorded but included in the physical count at 50,000
year end
Rent received in advance and credited to
income
18,000
Unrecorded unpaid taxes at year-end
20,000
QUESTIONS:
1. What is the correct net income for the year 2021?
2. What is the correct net income for the year 2022?

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