Straightarm Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/24 and 12/31/25...

Straightarm Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/24 and 12/31/25 contained the following errors:

	*2024*	*2025*
Ending inventory	$15,000 understatement	$24,000 overstatement
Depreciation expense	$6,000 understatement	$12,000 understatement

Failed to record Unearned Revenue at 12/31/25: $7,000
Straigtharm declared a cash dividend of $11,000 on 12/31/25. No journal entry was made in 2025. The dividend was paid on 1/3/26; Straightarm debited Retained Earnings and credited Cash.

12/31/26 Total Stockholders’ Equity is in error by:

Select one:

a. No Error

b. $25,000

c. $18,000

d. $29,000

e. $60,000

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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