Shannon Company began operations on January 1, 2013. The financial statements contained the following errors:

                                                                              2013                                  2014

Ending inventory                                   160,000 understated              150,000 overstated

Depreciation expense                           60,000 understated

Insurance expense                               100,000 overstated                 100,000 understated

Prepaid insurance                                 100,000 understated

On December 31, 2014, fully depreciated machinery was sold for P108,000 cash but the sale was not recorded until 2015. No corrections have been made for any of the errors. Ignoring income tax, what is the total effect of the errors on Working capital on December 31, 2014?

Answer rating: 100% (QA)

Error on working capital includes only the effect on ... View the full answer