The following numbers are taken from the financial statements of Sherry Company for year ended Dec....

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The following numbers are taken from the financial statements of Sherry Company for year ended Dec. 31, 2020. Revenues Expenses Net Income Assets Total Liabilities Unadjusted Bal Adjustment Adjusted Bal 120,000 80,000 40,000 100,000 30,000 SE Equity 70,000 15,000 Net Cash Flows from Operating Activities Net Cash Flows from Investing Activities -3,000 Net Cash Flows from Financing Activities 5,000 During the audit, auditors detected the following error: Error: Company made an error in computing and recording depreciation expense. Correct depreciation amount was $6,000, but company erroneously recorded only $4,000 of depreciation expense. What would be the adjusted balances for the above items in the financial statements after correcting the above error? The following numbers are taken from the financial statements of Sherry Company for year ended Dec. 31, 2020. Revenues Expenses Net Income Assets Total Liabilities Unadjusted Bal Adjustment Adjusted Bal 120,000 80,000 40,000 100,000 30,000 SE Equity 70,000 15,000 Net Cash Flows from Operating Activities Net Cash Flows from Investing Activities -3,000 Net Cash Flows from Financing Activities 5,000 During the audit, auditors detected the following error: Error: Company made an error in computing and recording depreciation expense. Correct depreciation amount was $6,000, but company erroneously recorded only $4,000 of depreciation expense. What would be the adjusted balances for the above items in the financial statements after correcting the above error?

Answer rating: 100% (QA)

SOLUTION To correct the error in computing and recording depreciation expense we need to adjust the expenses and the related assets 1 Adjustment for d... View the full answer