Answer is A. But please give EXPLAINATIONS & DETAIL CALCULATIONS!! Thank you ver
ID: 2536729 • Letter: A
Question
Answer is A.
But please give EXPLAINATIONS & DETAIL CALCULATIONS!! Thank you very much
Assume that no correcting entries were made at December 31, 2017. Ignoring income taxes, by how much will retained earnings at December 31, 2018 be overstated or understated?
a. $ 3,000 understated
b. $22,500 overstated
c. $22,500 understated
d. $27,000 understated
Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2018 and 2017 contained errors as follows: Ending inventory Depreciation expense 2018 $9,000 overstated $6,000 understated 2017 $24,000 overstated $18,000 overstatedExplanation / Answer
The correct answer is A - $3000
2017 Remarks Ending Inventory Overstatement-2017* (24,000.00) Ending Inventory Overstatement Means Cost of Goods Sold would have been is decreased Depreciation Expenses OverStated-2017* 18,000.00 Depreciation Expenses OverStated Means Net Income Would Have Reduced because of more expenses Net Income (6,000.00) 2018 Opening Inventory Overstatement-2017* 24,000.00 Opening Inventory Overstatement Means Cost of Goods Sold would have been is Increased Ending Inventory Overstated-2018* (9,000.00) Ending Inventory Overstatement Means Cost of Goods Sold would have been is decreased Depreciation Expenses UnderStated-2018 (6,000.00) Depreciation Expenses Understand Net Income 9,000.00 Net effect on Retained earnings effect 3,000.00 Retained Earnings is Under Stated