Net income for Mory Company for the years 2021 and 2022 is shown below. An audit of the accounts, however, disclosed the following errors: 2021 2022 Net income after income tax 246,500 312,500 Understatement of year-end inventory 25,000 Purchase of computer at year end charged to expense. The estimated useful life is 10 years. 40,000 Credit purchases of merchandise not recorded but included in the physical count at year end 50,000 Rent received in advance and credited to income 18,000 Unrecorded unpaid taxes at year-end 20,000 QUESTIONS: What is the correct net income for the year 2021? What is the correct net income for the year 2022?

Net income for Mory Company for the years 2021 and 2022 is shown below. An audit of the accounts, however, disclosed the following errors: 2021 2022 Net income after income tax 246,500 312,500...

Net income for Mory Company for the years 2021 and 2022 is shown below. An audit of the accounts, however, disclosed the following errors:

	2021	2022
Net income after income tax	246,500	312,500
Understatement of year-end inventory		25,000
Purchase of computer at year end charged to expense. The estimated useful life is 10 years.	40,000
Credit purchases of merchandise not recorded but included in the physical count at year end	50,000
Rent received in advance and credited to income		18,000
Unrecorded unpaid taxes at year-end		20,000

QUESTIONS:

Jun 10, 2022