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Question - Palmer Company has (incorrectly) determined its 1995 and 1996 net income to be $115,000 and $105,000, respectively. In a first-time audit of the company's financial statements, you find the following errors: Closing merchandise inventory was incorrectly determined as follows: $5,000 overstatement for 1995 and $15,000 overstatement for 1996. Revenue of $25,000 received in advance in 1995 was credited to a revenue account when received. Of this amount, $5,000 was earned in 1995, $12,000 was earned in 1996, and the remainder is expected to be earned in 1997. Accrued expenses of $11,500 were omitted at the end of 1996. Determine the correct amount of net income for 1995 and 1996.
How do i make a general journal entry to record the December 31 interest accrual. Please explain in detail sothat i understand what the answers mean.
Prepare any necessary adjusting entries at December 31, 2013
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