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Exercise 8-9 The net income per books of Pina Colada Industries Limited was determined without any knowledge of the following errors. The 2019 year was Pina Coladas first year in business. No dividends have been declared or paid. Year Net Income per Books Error in Ending Inventory 2015 $51,300 Overstated $4,700 2016 54,700 Overstated 9,900 2017 55,600 Understated 10,300 2018 56,900 No error 2019 59,500 Understated 2,200 2020 62,000 Overstated 9,100

Prepare a work sheet to show the adjusted net income figure for each of the six years after taking the inventory corrections into account. Errors in Inventories Year Net Income Per Books Over statement Jan. 1 Under statement Jan. 1 Over statement Dec. 31 Under statement Dec. 31 Corrected Net Income 2015 $51,300 $ $ $ $ $ 2016 54,700 2017 55,600 2018 56,900 2019 59,500 2020 62,000 $ $

Prepare a schedule that shows both the original retained earnings balance reported at the end of each year and the corrected amount. Year Original Net Income Balance Retained Earnings Corrected Net Income Revised Retained Earnings 2015 $51,300 $ $ $ 2016 54,700 2017 55,600 2018 56,900 2019 59,500 2020 62,000 $ $

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