P 4.55 Requirements 1. Carefully study the content in the section on LO 4-4 on pages...

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P 4.55 Requirements 1. Carefully study the content in the section on LO 4-4 on pages 140-145 of your textbook before you attempt the question. 2. Instead of writing a memo, provide separate paragraphs to identify and explain the monetary amount of each potential adjustment to income. Use a subtitle for each to include the accounts affected. For the adjustments, restrict your work to items in the income statement, but use other content, for example, balance sheet, to assist. Ignore materiality. 3. Prepare a schedule to reconcile unaudited income to the adjusted income. Start with unaudited income, 294,000 then list the gross adjustments you identify, the tax effect of total gross adjustments and end with adjusted income. See schedule outline below: Retail Company Summary of Potential problems Unaudited income Item 1 of 'n' Item 2 Item 3 Item 'n' Total adjustments 1 to 'n' Income tax expense (increase or decrease) Adjusted income See footnotes below effect $294,000 1 Sum of gross adjustments 1 to 'n'. 2 Multiply the total adjustments by the tax rate. If the total adjustment reduces income the income tax effect will increase income, and vice versa. 3 Sum of unaudited income, total adjustments and income tax expense effect P 4.55 Requirements 1. Carefully study the content in the section on LO 4-4 on pages 140-145 of your textbook before you attempt the question. 2. Instead of writing a memo, provide separate paragraphs to identify and explain the monetary amount of each potential adjustment to income. Use a subtitle for each to include the accounts affected. For the adjustments, restrict your work to items in the income statement, but use other content, for example, balance sheet, to assist. Ignore materiality. 3. Prepare a schedule to reconcile unaudited income to the adjusted income. Start with unaudited income, 294,000 then list the gross adjustments you identify, the tax effect of total gross adjustments and end with adjusted income. See schedule outline below: Retail Company Summary of Potential problems Unaudited income Item 1 of 'n' Item 2 Item 3 Item 'n' Total adjustments 1 to 'n' Income tax expense (increase or decrease) Adjusted income See footnotes below effect $294,000 1 Sum of gross adjustments 1 to 'n'. 2 Multiply the total adjustments by the tax rate. If the total adjustment reduces income the income tax effect will increase income, and vice versa. 3 Sum of unaudited income, total adjustments and income tax expense effect