Problem - Present your solution to the following problem in an Excel document.
The 2009 and 2010 financial statements of Daffney Company contain the following errors:
1. The ending inventory was overstated by $10,000 on December 31, 2009 and overstated by $7,000 on December 31, 2010.
2. A four-year insurance policy which cost $22,000 was charged to insurance expense when it was paid in advance on January 1, 2009.
3. Depreciation for equipment in the amount of $15,000 was not included in the 2009 financial statements.
4. A new roof and windows in the amount of $30,000 which are classified as capital expenditures were charged to expense in 2009 for a building. In turn, this caused depreciation in the amount of $5000, which was not recorded in the financial statements for 2010.
5. There were $10,000 of wages earned by employees in 2009 and not paid until 2010; these were recorded as an expense in 2009 instead of 2010.
Daffney Company reported net income of $100,000 in 2009 and $110,000 in 2010.
Please prepare a schedule in Excel to correct the net income for 2009 and 2010. Please start the schedule with the reported income for 2009 and 2010 and then work to a corrected figure. For this exercise, do not pay attention to income taxes.