Dropbox members must submit their solution. Upload your solution as an EXCEL or WORD file to your Late submissions will not be accepted Lowry Incorporated is a wholesale distributor for electronic parts. Financial statements for the years ended December 31, 2016 and 2017, reported the following amounts and subtotals Year 2016 2017 Shareholders Equity $400,000 400,000 Expenses $140,000 220,000 Net Income Assets $700,000 800,000 Liabilities 300,000 400,000 240,000 300,000 In 2018, the following situations occurred or came to light Internal auditors discovered that ending inventories reported on the financial statements the previous years were misstated due to faulty internal controls. Lowry accounts for inventories using FIFO and uses the periodic inventory system. The errors were in the following amounts: a. 2016 inventory 2017 inventory Understated by $20,000 Overstated by $30,000 A copyright costing $25,000 at the beginning of 2016 was expected to benefit operations for a tota of five years. The entire amount was debited to patents. However, it has not been amortized since acquired Lowry's conveyer equipment was depreciated by the sum-of-the-years'-digits (SYD) basis since it was acquired at the beginning of 2016 at a cost of $36,000. It has an expected useful life of six yea and an expected residual value of $6,000. At the beginning of 2018, Lowry decided to switch to straight-line depreciation A three-year casualty insurance policy was purchased at the beginning of 2016 for $18,000. The fu amount was debited to insurance expense at the time. No adjusting entries were made regardin the casualty insurance policy At the end of 2017, the company failed to accrue salaries of $10,000. The expense was recorded i 2018 when the salaries were paid On January 1, 2018, Lowry decided to change from the average inventory costing method to the FIFO inventory costing. Before 2018, the COGS under the average costing method was $40,000. It would have been $35,000 under the FIFO costing method. In 2018, the COGS under the average costing method was $42,000. It would have been $38,000 under FIFO. Only to toe b. c. d. e. f. g. On January 2, 2018, Lowry purchased a machine at a cost of $100,000. The machine has been depreciated using the straight-line method over an estimated 10-year life with an estimated resi value of $5,000. On January 1, 2018, Lowry changed the estimated useful life to a total of 12 yea and the estimated residual value was changed to $1,000 Lowry's books are closed for 2016 and 2017 but are still open in 2018