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Problem - Effects of Errors on Financial Statements
For a recent year, the balance sheet for The Campbell Soup Company includes accrued expenses of $579 million. The income before taxes for The Campbell Soup Company for the year was $1,079 million.
a. Assume the adjusting entry for $579 million of accrued expenses was not recorded at the end of the year. By how much would income before taxes have been misstated?
b. What is the percentage of the misstatement in (a) to the reported income of $1,079 million? Round to one decimal place.
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