r 31, 20X0 Inventory is overstated by $22,500 December 31, 20X1 Inventory is understated by $37,500 A $10,000 customer's deposit received in December 31, 20X1, was credited to sales in 20X1. The goods were actu
r 31, 20X0 Inventory is overstated by $22,500 December 31, 20X1 Inventory is understated by $37,500 A $10,000 customer's deposit received in December 31, 20X1, was credited to sales in 20X1. The goods were actu
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The unadjusted income statement of AZ Co. shows a net income of $125,000 for the year ended December 31, 20X1. The following date were discovered in the course of the examination of the company's records:
- December 31, 20X0 Inventory is overstated by $22,500
- December 31, 20X1 Inventory is understated by $37,500
- A $10,000 customer's deposit received in December 31, 20X1, was credited to sales in 20X1. The goods were actually shipped in January 20X2.
What is the adjusted net income of the firm for the year ended December 31, 20X1?
55,000
75,000
100,000
175,000
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