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Delver inc. is a calendar-year coporation. Its financial statements for the years ended 12/31/14 and 12/31/15 contained the following errors: 2014 Ending inventoiry $25,000 overstatement and depreciation $10,000 understatement, and for 2015 Ending inventory $40,000 understatement and depreciation $20,000 overstatement.
Assume that the 2014 errors were not corrected and no errors occurred in 2013. By what amount will 2014 income before income taxes be overstated or understated?
Assume that no correcting entries were made as 12/31/14, or 12/31/15. Ignoring income taxes, by how much will retained earnings at 12/31/15 be overstated or understated?
Average storage bin usage for various inventories was estimated to be 200 per day. The costs and cost drivers were determined to be as follows:
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