XYZ Corp. is a calendar-year corporation whose financial statementsfor 2019 and 2020 included errors as follows:Ending Inventory.YearDepreciation Expense201930,000 overstated$36,000 overstatedO a. $4,000 decreaseO b. $32,000 increase12,000 understatedTime left 2:51:11$202010,000 understatedAssume that purchases were recorded correctly and that nocorrecting entries were made at December 31, 2019 or December 31,2020. Ignoring income taxes, by how much should XYZ's retainedearnings be retrospectively adjusted at January 1, 2021?

Errors are mistakes or omissions which are made by an accountant, intentionally or unintentionally,…

Assume that purchases were recorded correctly and that no correcting entries were made at December 31, 2019 or December 31, 2020. Ignoring income taxes, by how much should XYZ's retained earnings be retrospectively adjusted at January 1, 2021? O a. $4,000 decrease O b. $32,000 increase

Assume that purchases were recorded correctly and that no correcting entries were made at December 31, 2019 or December 31, 2020. Ignoring income taxes, by how much should XYZ's retained earnings be retrospectively adjusted at January 1, 2021? O a. $4,000 decrease O b. $32,000 increase

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

XYZ Corp. is a calendar-year corporation whose financial statements
for 2019 and 2020 included errors as follows:
Ending Inventory.
Year
Depreciation Expense
2019
30,000 overstated
$36,000 overstated
O a. $4,000 decrease
O b. $32,000 increase
12,000 understated
Time left 2:51:11
$
2020
10,000 understated
Assume that purchases were recorded correctly and that no
correcting entries were made at December 31, 2019 or December 31,
2020. Ignoring income taxes, by how much should XYZ's retained
earnings be retrospectively adjusted at January 1, 2021?

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