a. The accounts receivable confirmation work revealed one pricing misstatement. The book value of $12,955.68 should be $11,984.00. The total misstatement based on this difference is $14,465, which includes a $972 known misstatement and an unknown projected misstatement of $13,493.

b. Nature Sporting Goods had understated the accrued vacation pay by $13,000. A review of the prior-year documentation indicates the following uncorrected misstatements:

Accrued vacation pay was understated by $9,000.

Sales and accounts receivable were overstated by an estimated $60,000 because of cutoff errors.

You may wish to take some notes and prepare a schedule on paper to summarize the impact of the misstatements identified above and the related income tax effects. In the space below, fill in the amounts to be adjusted as requested. Enter all amounts as positive (no signs).

net earnings before tax
income tax expense
current assets
current liabilities
retained earnings