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Falcon Co's financial statements for year 1 and year 2 include the following errors: Year 1 - Ending Inventory overstated by $36,000 & Depreciation Expense overstated by $30,000 Year 2 - Ending Inventory understated by $12,000 & Depreciation Expense understated by $10,000 Assuming that all purchases were correctly recorded and that there were no correcting entries made at Dec 31 year 1 or Dec 31 year 2, how much should Falcon Co's retained earnings be "retrospectively" adjusted at Jan 1 year 3? (ignore income taxes)

A)$2,000 increase

B)$4,000 decrease

C)$32,000 increase

D)$8,000 increase

(Question 14 and 15 share info) Rolex Co. follows ASPE. Rolex Co's transactions for the year ended Dec 31, year 1 included the following: 1. Accounts payable increased by $100,000. 2. Sold long-term investments for $250,000. 3. Accounts receivable decreased by $50,000. 4. Purchased machinery and equipment for $62,500 cash. 5. Paid cash dividends of $300,000. 6. Purchased land for $375,000 cash. 7. Borrowed $275,000 from the bank on a long-term note. 8. Issued 1,000 common shares for $37,500. The cash used in investing activities for year 1 was:

A)$(25,000)

B)$(87,500)

C)$(187,500)

D)$(337,500)

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