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What is the total net effect of the errors

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Reference no: EM133154764

Question - The following errors were contained in the Sheridan Company's December 31 year- end financial statements:

 

Dec. 31, 2021

Dec. 31, 2022

Ending

$50,000

$75,000

Inventory

understated

Overstated

An insurance premium of $84,000 was prepaid in 2021 covering the years 2021, 2022, and 2023. The prepayment was recorded with a debit to insurance expense in 2021. In addition, on December 31, 2022, fully depreciated machinery (the machinery had a net book value of zero) was sold for $35,000 cash, but the sale was not recorded until 2023. There were no other errors during 2022 or 2023 and no corrections have been made for any of the errors. Ignore income tax considerations. What is the total net effect of the errors on Sheridan's 2022 net income?

Reference no: EM133154764

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