1) Using the same information in the previous problem, now assume that, in addition to the previously described inventory errors, depreciation expense was understated by 15,000 in 2015 and overstated by 20,000 in 2016. By what amount should beginning R.E. balance be adjusted on 1/1/17?

2)In 2015, Epsilon incorrectly recorded ending inventory as $970,000 instead of $790,000. The error was discovered on 1/1/16. Tax rates for all years is 40%. By what amount and direction (increase or decrease) should R.E. be adjusted on 1/1/16?

Answer rating: 100% (QA)

1 To adjust the beginning Retained Earnings RE balance on 1117 we need to consider the impact of the ... View the full answer