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 $22,500December 31, 20X1 Inventory is understated by $37,500A $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?55,00075,000100,000175,000

Income statement for any particular year shows the amount of incomes and expenses incurred during…

Answered: r 31, 20X0 Inventory is overstated by…

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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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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