Requirements:a. What are the net effects of the errors on Biden's 20x1 and 20x2 profit or loss, repesctively?b. What is the effect of the errors on Biden's December 20x2 retained earnings? 16. Biden Corp. reports on a calendar-year basis. Its 20x1 and 20x2financial statements contained the following errors:20x120x2Under (Over) statement of ending inventory 10,000Depreciation understatementFailure to accrue salaries at year end(4,000)4,0006,0008,00012,000(Adapted)Requirements:a.What are net effects of the errors on Biden's 20x1 and 20x2profit or loss, respectively?b. What is the effect of the errors on Biden's December 31, 20x2retained earnings?

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Answered: 16. Biden

Business

Accounting

16. Biden

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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Question

Requirements:

a. What are the net effects of the errors on Biden's 20x1 and 20x2 profit or loss, repesctively?

b. What is the effect of the errors on Biden's December 20x2 retained earnings?

16. Biden Corp. reports on a calendar-year basis. Its 20x1 and 20x2
financial statements contained the following errors:
20x1
20x2
Under (Over) statement of ending inventory 10,000
Depreciation understatement
Failure to accrue salaries at year end
(4,000)
4,000
6,000
8,000
12,000
(Adapted)
Requirements:
a.
What are net effects of the errors on Biden's 20x1 and 20x2
profit or loss, respectively?
b. What is the effect of the errors on Biden's December 31, 20x2
retained earnings?

Definition Definition Amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item

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