The following errors were made in the accounting records of Gagnon Corp. in 2013 and were not discovered until 2014.
a. Management revenue of $3,750 earned in 2013 was not recorded until it was collected in 2014.
b. One year of Amortization Expense, $4,200, was recorded instead of three- quarters of the amount.
c. A deposit of $4,000 for Management Service to be delivered in 2014 was recorded as Management Revenue in 2013.
d One-year insurance premium of $3,300 for 2014 was recorded as Insurance Expense for 2013 when it was paid.
e. Half of the unearned revenue of $4,500 was earned in 2013, but was not recorded.
For each of the independent errors in parts (a) through (e), identify the net effect on assets, liabilities, shareholders’ equity, and net income for 2013 and 2014. Show understatements by “U,” overstatements by “O,” and no effect by "NE,” and identify their amounts.

  • CreatedJuly 08, 2015
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