Question: Salamander Ltd. makes the following errors during the current year. Each error is an independent case. 1. Ending inventory is overstated by $1,020, but purchases

Salamander Ltd. makes the following errors during the current year. Each error is an independent case.

1. Ending inventory is overstated by $1,020, but purchases are recorded correctly

2. Both endcing inventory and a purchase on account are understated by the same amount (assume this purhcase of $1500 was recorded in the following year).

3. Ending inventory is correct, but a purhcase on account was not recorded (assume this purchase of $850 was recorded in the following year).

Instructions: Indicate the effect of each error on working capital, current ratio (assume that the current ratio is great than 1), retained earnings and net income for the current year and the following year

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