Bettner, Inc., is a calendar year corporation whose financial statements for 2015 and 2016 included errors as

Question:

Bettner, Inc., is a calendar year corporation whose financial statements for 2015 and 2016 included errors as follows:

Year Ending Inventory Depreciation Expense

2015…………$12,000 overstated…………...$22,300 overstated

2016…………....8,000 understated…………….6,000 understated

Assume that inventory purchases were recorded correctly and that no correcting entries were made at December 31, 2015, or December 31, 2016. The errors were discovered in 2017, after the 2016 financial statements were issued.

Required:

1. Ignoring income taxes, prepare the journal entry Bettner would make in 2017 to correct the errors.

2. Describe the content of the comparative periods in Bettner's 2017 financial statements. That is, how is the correction reflected in the 2017 financial report?

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