Error Correction 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 December 31 Ending Inventory Overvalued Ending Inventory Undervalued Prepaid Expense Unearned Revenues Accrued Expense Accrued Revenues 2017 $ — $4,000 $600 $ — $300 $ — 2018 3,000 — — 500 — 700 2019 2,000 — 400 — 100 2020 — 1,000 900 200 350 800 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. ANDERSON CORPORATIONWorksheet to Correct Net Income2017 - 2020 Net Income 2017 Net Income 2018 Net Income 2019 Net Income 2020 Ending Inventory Prepaid Expense Unearned Revenues Accrued Expense Accrued Revenues Uncorrected net income $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 2017: Inventory undervalued fill in the blank 5 fill in the blank 6 Prepaid expense omitted fill in the blank 7 fill in the blank 8 Accrued expense omitted fill in the blank 9 fill in the blank 10 2018: Inventory overvalued fill in the blank 11 fill in the blank 12 Unearned revenues omitted fill in the blank 13 fill in the blank 14 Accrued revenues omitted fill in the blank 15 fill in the blank 16 2019: Inventory overvalued fill in the blank 17 fill in the blank 18 Prepaid expense omitted fill in the blank 19 fill in the blank 20 Accrued expense omitted fill in the blank 21 fill in the blank 22 2020: Inventory undervalued fill in the blank 23 $fill in the blank 24 Prepaid expense omitted fill in the blank 25 $fill in the blank 26 Unearned revenues omitted fill in the blank 27 $fill in the blank 28 Accrued expense omitted fill in the blank 29 $fill in the blank 30 Accrued revenues omitted fill in the blank 31 $fill in the blank 32 Corrected amounts $fill in the blank 33 $fill in the blank 34 $fill in the blank 35 $fill in the blank 36 $fill in the blank 37 $fill in the blank 38 $fill in the blank 39 $fill in the blank 40 $fill in the blank 41 Retained earnings, 12/31/2020, corrected $fill in the blank 42

Error Correction 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 December 31 Ending Inventory Overvalued Ending Inventory Undervalued Prepaid Expense Unearned Revenues Accrued Expense Accrued Revenues 2017 $ — $4,000 $600 $ — $300 $ — 2018 3,000 — — 500 — 700 2019 2,000 — 400 — 100 2020 — 1,000 900 200 350 800 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. ANDERSON CORPORATIONWorksheet to Correct Net Income2017 - 2020 Net Income 2017 Net Income 2018 Net Income 2019 Net Income 2020 Ending Inventory Prepaid Expense Unearned Revenues Accrued Expense Accrued Revenues Uncorrected net income $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 2017: Inventory undervalued fill in the blank 5 fill in the blank 6 Prepaid expense omitted fill in the blank 7 fill in the blank 8 Accrued expense omitted fill in the blank 9 fill in the blank 10 2018: Inventory overvalued fill in the blank 11 fill in the blank 12 Unearned revenues omitted fill in the blank 13 fill in the blank 14 Accrued revenues omitted fill in the blank 15 fill in the blank 16 2019: Inventory overvalued fill in the blank 17 fill in the blank 18 Prepaid expense omitted fill in the blank 19 fill in the blank 20 Accrued expense omitted fill in the blank 21 fill in the blank 22 2020: Inventory undervalued fill in the blank 23 $fill in the blank 24 Prepaid expense omitted fill in the blank 25 $fill in the blank 26 Unearned revenues omitted fill in the blank 27 $fill in the blank 28 Accrued expense omitted fill in the blank 29 $fill in the blank 30 Accrued revenues omitted fill in the blank 31 $fill in the blank 32 Corrected amounts $fill in the blank 33 $fill in the blank 34 $fill in the blank 35 $fill in the blank 36 $fill in the blank 37 $fill in the blank 38 $fill in the blank 39 $fill in the blank 40 $fill in the blank 41 Retained earnings, 12/31/2020, corrected $fill in the blank 42

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

Error Correction

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
December 31	Ending Inventory Overvalued	Ending Inventory Undervalued	Prepaid Expense		Unearned Revenues	Accrued Expense	Accrued Revenues
2017	$ —	$4,000	$600		$ —	$300	$ —
2018	3,000	—	—		500	—	700
2019	2,000	—	400		—	100
2020	—	1,000	900		200	350	800

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.

ANDERSON CORPORATIONWorksheet to Correct Net Income2017 - 2020

	Net Income 2017	Net Income 2018	Net Income 2019	Net Income 2020	Ending Inventory	Prepaid Expense	Unearned Revenues	Accrued Expense	Accrued Revenues
Uncorrected net income	$fill in the blank 1	$fill in the blank 2	$fill in the blank 3	$fill in the blank 4

2017: Inventory undervalued	fill in the blank 5	fill in the blank 6
Prepaid expense omitted	fill in the blank 7	fill in the blank 8
Accrued expense omitted	fill in the blank 9	fill in the blank 10

2018: Inventory overvalued		fill in the blank 11	fill in the blank 12
Unearned revenues omitted		fill in the blank 13	fill in the blank 14
Accrued revenues omitted		fill in the blank 15	fill in the blank 16

2019: Inventory overvalued			fill in the blank 17	fill in the blank 18
Prepaid expense omitted			fill in the blank 19	fill in the blank 20
Accrued expense omitted			fill in the blank 21	fill in the blank 22

2020: Inventory undervalued				fill in the blank 23	$fill in the blank 24
Prepaid expense omitted				fill in the blank 25		$fill in the blank 26
Unearned revenues omitted				fill in the blank 27			$fill in the blank 28
Accrued expense omitted				fill in the blank 29				$fill in the blank 30
Accrued revenues omitted				fill in the blank 31					$fill in the blank 32

Corrected amounts	$fill in the blank 33	$fill in the blank 34	$fill in the blank 35	$fill in the blank 36	$fill in the blank 37	$fill in the blank 38	$fill in the blank 39	$fill in the blank 40	$fill in the blank 41
Retained earnings, 12/31/2020, corrected	$fill in the blank 42

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