The balance sheet of Ipod Corporation on December 31, 2024: Ipod Corporation

The balance sheet of Ipod Corporation on December 31, 2024:

Ipod Corporation BALANCE SHEET AS OF DECEMBER 31, 2024
*Assets*
Cash	$ 40,000
Accounts and notes receivable	30,000
Inventory	90,000
	$160,000
*Liabilities and Capital*
Accounts and notes payable	$ 20,000
Common stock	100,000
Retained earnings	40,000
	$160,000

These errors were made by Ipod on December 31, 2023 and were not corrected: Ending inventory understated $2,400 and prepaid expense of $1,000 omitted. On December 31, 2024, unearned revenue of $1,100 was omitted, and accrued revenue of $1,400 was omitted.

The net income shown by the books for 2024 was $13,200.

The correct 2024 Net Income is:

Select one:

a. $7,300

b. $12,300

c. $12,100

d. $14,900

e. $10,100

Solutions

Expert Solution

Answer: e. $10,100

Calculations:


Net income shown by the books for 2024	$13,200
Ending inventory overstated in last year	($2,400)
Prepaid expenses omitted in last year	($1,000)
Unearned revenue omitted in current year	($1,100)
Accrued revenue omitted in current year	$1,400
The correct 2024 net income	$10,100

Thus, Option e is correct and remaining options are incorrect.

ekkarill92 answered 2 years ago

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