Ex 3-22 Effects of error on financial statements
For a recent year, the balance sheet for the Campbell Soup Company includes accrued expenses of $598 million. The income before taxes for the Campbell Soup Company for the year was $1,106 million.
a. Assume the adjusting entry for $598 million of accrued expenses was not recorded at the end of the year. By how much would income before taxes have been misstated?
b. What is the percentage of the misstatement in (a) to the reported income of $1,106 million? Round to the one decimal place.