Taesung Co., Ltd. providing furniture services and providing free defect repair for 3 years after the service is provided. The balance of the defect repair terms based on 2005 is 2,000,000 won and the amount spent on fixing errors in 2005 is 500,000 won. Taesung Co., Ltd. It is estimated that it will incur future repair costs equal to 4% of the service revenue. Meanwhile, Taesung Co., Ltd. operates a pension pension system and the pension balance based on 2005 years is 8,000,000 won. In the 2005 earnings report, the pension benefit amount is 3,000,000 won and by the end of 2005, the estimated total pension benefit for all employees is 9,000,000 won.

(1) What is the balance of the defect repair terms in Taesung's financial statements by the end of 2005?

(2) What is the actual severance pay paid for retired employees in 2005?

Answer rating: 100% (QA)

A In order to properly correct an error it is necessary to retrospectively restate the prior period financial statements A counterbalancing error occu... View the full answer