Two Incorporated reported the following net income: 2019 9,680,000 2020 13,250,000 In an audit conducted in 2020, the following were determined: a. The beginning inventory in 2019 is overstated by 330,000 while the ending inventory in 2020 is overstated by 360,000 b. Salaries amounting to 500,000 and 320,000 were not accrued in 2019 and 2020 respectively c. A note amounting to 300,000 and bears an interest of 12% was received from a customer in June 1, 2019. No interest was accrued in 2019 but in 2020, the company accrued interest on the note which is equivalent for 2 years to compensate for the error committed the previous year. Ignore income Tax Effects Determine the corrected net income in 2020
Two Incorporated reported the following net income:
|
2019 |
9,680,000 |
|
2020 |
13,250,000 |
In an audit conducted in 2020, the following were determined:
a. The beginning inventory in 2019 is overstated by 330,000 while the ending inventory in 2020 is overstated by 360,000
b. Salaries amounting to 500,000 and 320,000 were not accrued in 2019 and 2020 respectively
c. A note amounting to 300,000 and bears an interest of 12% was received from a customer in June 1, 2019. No interest was accrued in 2019 but in 2020, the company accrued interest on the note which is equivalent for 2 years to compensate for the error committed the previous year.
Ignore income Tax Effects
Determine the corrected net income in 2020
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