The following errors were made in the accounts of Glee Ltd in 2014 and were not discovered until 2015. 

1.  Revenues of $6,200 earned in 2015 were recorded as being earned in 2014. 

2.  The 2014 depreciation expense was understated by $5,000. 

3.  A deposit of $9,000 was received in 2014 from one of its customers for services that are to be  rendered in 2015. The $9,000 was recorded in the revenue account in 2014. 

4.  The company paid and expensed in December of 2014, $3,700 in insurance premiums on a  policy that provides coverage for the period January 1, 2015 to December 31, 2015. 

Required:

For each of the above independent errors, identify the net effect on assets, liabilities, shareholders’  equity and net income for 2014 and 2015. Show understatements by “U,” overstatements by “O,” and  no effect by “NE”.

 

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Assets 2014 2015 2014 2015 2015 Liabilities 1. 2. O O O NE NE NE NE NE U NE 3. NE NE 4. U NE NE NE Shareholders' Equity 2014 2015 O O O U NE O NE NE Net Income 2014 2015 O O O U U NE U O Assets 2014 2015 2014 2015 2015 Liabilities 1. 2. O O O NE NE NE NE NE U NE 3. NE NE 4. U NE NE NE Shareholders' Equity 2014 2015 O O O U NE O NE NE Net Income 2014 2015 O O O U U NE U O