Reference no: EM132809562

Ethel Corporation reported profit for the year 2019 and 2020 at P550,000 and P700,000, respectively. Your audit of the company's account disclosed the need for adjustments as follows:

Overstatement of ending inventory due to error in pricing

2019- 29,000
2020 - 33,000

Omission of depreciation on newly-acquired equipment

2019 - 15,000
2020 - 15,000

Understatement of commission receivable

2019 - 22,000
2020 - 18,000
A purchase of merchandise was not recorded until the following year, and also was not included in the ending inventory

2019 - 60,000

Problem 1: What is the effect of the foregoing errors (overstatement) on total assets at December 31, 2020?

Group of answer choices

Option 1: 36,000

Option 2: 45,000

Option 3: 66,000

Option 4: 30,000