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Determine the retained earnings and working capital

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Reference no: EM132894122

You discovered the following errors in connection with your examination of the financial statement of UCP Corporation.

  • Purchase of merchandise on account on December 28, 2019 amounting 120,000 was not recorded until it was paid on January 5, 2020. The merchandise was properly included in the ending inventory in 2019.
  • Sale of merchandise on account on December 31, 2019 amounting to 160,000 was not recorded until it was collected in January 15, 2020. The merchandise was not included in its 2019 ending inventory.
  • On December 31, 2020, footings and extensions on their inventory balance was overstated by 400,000.

The following data were extracted from the financial statement of UCP Corporation:

                                           2019.                  2020

Net Income.                 400,000.            320,000
Working Capital.            360,000.             520,000
Retained earnings, end    400,000.           720,000

Problem a: Based on the result of your analytical procedure and your audit, determine the following:

1. Net Income in 2019
2. Working Capital, end of 2019
3. Retained Earnings, end of 2019
4. Net Income in 2020
5. Working Capital, end of 2020
6. Retained earnings, end of 2020

Reference no: EM132894122

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