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Good will was purchased and expensed and is impaired by 10% each year.

Assignment #1 For three years the Sandy Caven Company failed to recognize accruals, prepayments, and other transactions in its accounts. Reported net income and a listing of the errors appear below. 20X0 2001 2002 2008 Failed to record accretion expen 14. $ 4,000 2,500 800 1,800 1,500 $ (1,000) - 4,800 200 nil 1,500 5. 7. nil 2,800 Reported net income (loss)... Failed to record accrued revenues ...... ...... $ 12,000 ...2,000 Failed to record uncollectible accounts expense ...bacl debt 600 Failed to record accrued salaries ........ 1,300 Understated depreciation expense .... 1,200 Goodwill purchased and expensed A (should-be-amortized over ten years) ... 5,000 Overstated ending inventories ........ 3,600 Failed to record purchase on account: merchandise property included in ending inventory .............. nil Failed to recognize unused supplies as an asset (expensed them instead) ......... Failed to recognize gain on sale of land; land credited for amount of proceeds ..... Failed to recognize uneamed revenue at end of year .................. 1,000 nil 9. 4,000 400 10. nil 11. 900 Required: 1. Recalculate the correct/adjusted net income for each year

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