Question: Part III ( 14 points) The reported net incomes for the first 2 years of Vaughn Products, Inc., were as follows: 2017, $134,800; 2018, $172,600.

Part III ( 14 points)

The reported net incomes for the first 2 years of Vaughn Products, Inc., were as follows: 2017, $134,800; 2018, $172,600. Early in 2019, the following errors were discovered.

  1. Depreciation of equipment for 2017 was overstated $17,600.
  2. December 31, 2017, inventory was understated $47,700.
  3. December 31, 2018, inventory was overstated $15,800.

Prepare the correcting entry(s) necessary when these errors are discovered as of 1/1 2019:

Ignore income tax considerations.

General Journal

D

C

Retained Earnings

$38,200

Inventory

$16,100

Accumulated Depreciation (37700-15600)

22100

What is the corrected net income for 2017?

What is the corrected net income for 2018?

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