Q:
a. The Z Company sold goods to the X Company FOB destination on 31st December, 2011. The Z Company added the sale in net income. The amount was $25,000.
b. Ending inventory for 2011 was understated by $5,000.
c. Interest expense on bonds was understated for 2011 and 2012 by $1,800 every year.
d. Repair bills in the amount of $8,000 for 2011 and $9,000 for 2012 was incorrectly charged to the equipment account. The company uses straight-line depreciation for all assets and a 10 year life with no salvage value.
Required:
Prepare two schedules, one indicating the corrected income for 2011 and one for the corrected income for 2012.