In 2022, Draper Company discovered errors made in 2019-2021, its first three years of operation. 202120202019Items not recognized: Prepaid expenses$1,300$900$550Accrued expenses950700800Other information: Reported net income$23,000$25,000$20,000Dividends declared and paid4,1002,6005,000Common stock and additional paid in capital at 12/3122,00017,00015,000 Indicate the error in 12/31/21 Working Capital:How do I compute this?

Working capital represents the ability of the company to manage its day to day business expenses. It…

Answered: In 2022, Draper Company discovered…

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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In 2022, Draper Company discovered errors made in 2019-2021, its first three years of operation.

	2021	2020	2019
Items not recognized:
Prepaid expenses	$1,300	$900	$550
Accrued expenses	950	700	800
Other information:
Reported net income	$23,000	$25,000	$20,000
Dividends declared and paid	4,100	2,600	5,000
Common stock and additional paid in capital at 12/31	22,000	17,000	15,000

Indicate the error in 12/31/21 Working Capital:

How do I compute this?

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