Wagner Co. began operations on January 1, 2007. Financial statement for 2007 and 2008 contained the following errors.
Dec 31, 2007 Dec 31, 2008
Ending inventrory 90,000 to high 114,000 to high
Depreciation Exp 48,000 to low ----
accumulated dep 48,000 to low 48,000 to low
insurance exp 42,000 to high 42,000 to low
prepaid insurance 36,000 to low 42,000 to low
In addition, on December 26, 2008 fully dpreciated equipment was sold for $58,000, but the sale was not recorded until 2009. No correcctions have been made for any of the errors.
Insturctions:
Ignoring income tax show your calcuations of the total effect of the errors on 2008 net income.