Part 1 Dyke Company's net incomes for the past three years are presented below (ignore taxes): 2021 2020 $450,000 $360,000 2022 $480,000 During the 2022 year-end audit, the following items come to your attention: Dyke bought equipment on January 1, 2019 for $490,000 with a $40,000 estimated salvage value and a six-year life. The company debited an expense account and credited cash on the purchase date for the entire cost of the asset. (Straight-line method) Required (a) Prepare in general journal form the entry necessary to correct the books for the transaction above, assuming that the books have not been closed for the current year. (b) Compute the net income to be reported each year 2020 through 2022. Ignore taxes. (c) Assume that the beginning retained earnings balance (unadjusted) for 2020 was $1,260,000. At what adjusted amount should this beginning retained earnings balance for 2020 be stated, assuming that comparative financial statements were prepared? Part 2 Vance Company reported net incomes for a three-year period as follows: 2019, $191,000; 2020, $199,000; 2021, $180,000. In reviewing the accounts in 2022 after the books for the prior year have been closed, you find that the following errors have been made in summarizing activities: 2019 Understatement of accrued advertising expense 6,600 2020 12,000 2021 7,200 Required (a) Determine corrected net incomes for 2019, 2020, and 2021. (b) Give the entry to bring the books of the company up to date in 2022, assuming that the books have been closed for 2021.

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