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

Expert Solution

ekkarill92 answered 2 years ago

Straightarm Inc. is a calendar-year corporation. Its financialstatements 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:20242025Ending inventory$15,000 understatement$24,000 overstatementDepreciation expense$6,000 understatement$12,000 understatementFailed to record Unearned Revenue at 12/31/25: $7,000Straightarm 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.12/31/25 Liabilities are in error by:Select one:a. $7,000b. $18,000c. $11,000d. $4,000

Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2015 and 2014 contained...

Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2015 and 2014 contained errors as follows: 2015 2014 Ending inventory $6,000 overstated $16,000 overstated Depreciation expense $4,000 understated $12,000 overstated Assume that no correcting entries were made at December 31, 2014. Ignoring income taxes, by how much will retained earnings at December 31, 2015 be overstated or understated?

Ancelotti, Inc. is a calendar-year corporation. Its financial statements for the years 2011 and 2010 contained...

Ancelotti, Inc. is a calendar-year corporation. Its financial statements for the years 2011 and 2010 contained errors as follows: 1) Ending Inventory for 2011 is overstated by $3,000 2) Ending Inventory for 2010 is overstated by $8,000 3) Salaries expense for 2011 is understated by $2,000 4) Salaries expense for 2010 is overstated by $6,000 No correcting entries were made at December 31, 2010. Assuming no taxes, by how much will retained earnings at December 31, 2011 be overstated or...

Exercise 24-1 (Essay) Madrasah Corporation issued its financial statements for the year ended December 31, 2017,...

Exercise 24-1 (Essay) Madrasah Corporation issued its financial statements for the year ended December 31, 2017, on March 10, 2018. The following events took place early in 2018. (a) On January 10, 10,000 shares of $5 par value common stock were issued at $66 per share. (b) On March 1, Madrasah determined after negotiations with the Internal Revenue Service that income taxes payable for 2017 should be $1,270,000. At December 31, 2017, income taxes payable were recorded at $1,100,000. Discuss...

Go-Go & Co. is preparing its financial statements for the year ended 12/31/2015. As of 12/31,...

Go-Go & Co. is preparing its financial statements for the year ended 12/31/2015. As of 12/31, the company’s current assets are less than its current liabilities. The company is evaluating whether it must comply with the Codification’s going concern disclosure requirements, established in ASU 2014-15. Locate the Codification topic that addresses this issue. Explain whether disclosure of going concern issues is currently required for Go-Go & Co, considering the transition guidance provided for this topic. Next, explain whether such disclosure...

Roadhouse Inc. releases its financial statements in April each year. For the year ended December 31,...

Roadhouse Inc. releases its financial statements in April each year. For the year ended December 31, 2022, Roadhouse had pretax accounting income of $405 million. Roadhouse also had taxable income of $427.5 million. This difference between pretax accounting income and taxable income was due to a $22.5 million dollar temporary difference which was received in December 2022 and related to unearned rent revenue that would be recognized in the following year (2023). The tax rate for 2022 is 30%. What...

Given the following financial statements for ARGON Corporation Income Statement Year Ended 12/31/18 Sales $1,300,000 Cost...

Given the following financial statements for ARGON Corporation Income Statement Year Ended 12/31/18 Sales $1,300,000 Cost of Goods Sold 750,000 Operating Expenses 200,000 Depreciation Expense 100,000 EBIT 250,000 Interest Expense 50,000 EBT 200,000 Taxes (40%) 80,000 Net Income $120,000 Balance Sheet 12/31/2018 12/31/2017 Current Assets $50,000 $45,000 Fixed Assets 430,000 350,000 Total Assets $480,000 $395,000 Current Liabilities $35,000 $50,000 Long-term Debt 330,000 270,000 Common Stock 5,000 5,000 Retained Earnings 110,000 70,000 Total Liabilities & Equity $480,000 $395,000 What is ARGON’s...

Colander Co is preparing its financial statements for the year ended 31 December 2018 and has...

Colander Co is preparing its financial statements for the year ended 31 December 2018 and has a number of issues to deal with regarding non-current assets. (1) Colander has suffered an impairment loss of €90,000 to one of its cash-generating units. The carrying amounts of the assets in the cash-generating unit prior to adjusting for impairment are: €'000 Goodwill 60 Land and buildings 100 Plant and machinery 50 Net current assets 10 (2) During the year to 31 December 2018...

Lion Pte Ltd is finalising its financial statements for the year ended 31 December 20X1. The...

Lion Pte Ltd is finalising its financial statements for the year ended 31 December 20X1. The date of authorisation of financial statements for issue was 14 March 20X2 and the annual general meeting is scheduled on 23 April 20X2. The following events occurred as follows: (a) Inventory held by Lion Pte Ltd was recorded at its cost of $1,104,000 at 31 December 20X1 in the statement of financial position. The whole inventory was damaged by flood water in December 20X1....

XY Pte Ltd is finalising its financial statements for the year ended 31 December 20X1. The...

XY Pte Ltd is finalising its financial statements for the year ended 31 December 20X1. The date of authorisation of financial statements for issue was 14 March 20X2 and the annual general meeting is scheduled on 23 April 20X2. The following events occurred as follows: (a) Inventory held by XY Pte Ltd was recorded at its cost of $1,104,000 at 31 December 20X1 in the statement of financial position. The whole inventory was damaged by flood water in December 20X1....

Question