Solution-Determine the net adjustment to the beginning

Determine the net adjustment to the beginning balance

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Reference no: EM132998814

Question - Eleven Incorporated has determined its 2019, 2020 and 2021 net income figures to be 1,250,000: 1,300,000 and 1,875,000 respectively. In an audit conducted, the following errors were determined:

a. Beginning inventories in 2019, 2020 and 2021 were overstated by 30,000; understated by 60,000 and overstated by 80,000 respectively.

b. Deferred income of 60,000 and prepaid expenses of 24,000 were not recorded in 2019 and 2020 respectively.

c. Depreciation in 2019 was overstated by 16,000 while in 2021, depreciation was understated by 40,000.

d. In 2021, dividends declared amounting to 400,000 were incorrectly recorded as 40,000.

Required -

Determine the net adjustment to the beginning balance of retained earnings in 2021 (increase/-decrease) if the books in 2021 are still open

What is the adjusted net income in 2021?

What is the adjusted net income in 2020?

Reference no: EM132998814

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Determine the net adjustment to the beginning balance

Reference no: EM132998814

Reference no: EM132998814

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