Question: ABC Co. has the following information relating to some errors that were discovered regarding their income statement in 2013 and 2014: Ending Inventory Depreciation Expense

ABC Co. has the following information relating to some errors that were discovered regarding their income statement in 2013 and 2014:

Ending Inventory

Depreciation Expense

2013

$3,000 overstated

$1,000 understated

2014

$2,000 understated

$4,000 overstated

ABC Co reported a net income of $95,000 in 2013 and $90,000 in 2014. Assume that no corrections were made and ignore income taxes.

1) Calculate the corrected net income for 2013 and 2014. Please show all calculations. Thank you.

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