While examining the December 31, 2018 financial statements of Sydney company, the following errors are discovered: *Inventory on January 1 had been overstated by P30,000. *Inventory on December 31 was understated by P60,000. During 2018, Donna received a P120,000 cash advance from customer for merchandise to be manufactured and shipped during 2019.  The amount was credited to sales revenue. *The net income reported on the 2018 income statement before reflecting any adjustment is P3,000,000.   What is the corrected net income for the year ended December 31, 2018? ANSWER:  2,970,000 Pls provide solution and explanation for the answer above

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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While examining the December 31, 2018 financial statements of Sydney company, the following errors are discovered:

*Inventory on January 1 had been overstated by P30,000.

*Inventory on December 31 was understated by P60,000.

During 2018, Donna received a P120,000 cash advance from customer for merchandise to be manufactured and shipped during 2019.  The amount was credited to sales revenue.

*The net income reported on the 2018 income statement before reflecting any adjustment is P3,000,000.  

What is the corrected net income for the year ended December 31, 2018?

ANSWER:  2,970,000

Pls provide solution and explanation for the answer above

 

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