In 2022, Draper Company discovered errors made in 2019-2021, itsfirst three years of operation.
| 2021 | 2020 | 2019 |
Items not recognized: | | | |
Prepaid expenses | $1,300 | $900 | $550 |
Unearned Revenues | 950 | 700 | 800 |
Other information: | | | |
Reported net income | $23,000 | $25,000 | $20,000 |
Dividends declared and paid | 4,100 | 2,600 | 5,000 |
Common stock and additional paid in capital at12/31 | 22,000 | 17,000 | 15,000 |
Indicate the error in 12/31/21 RetainedEarnings:
Select one:
a. $400 overstated
b. $350 overstated
c. $400 understated
d. $350 understated
e. $550 understated
Question 29
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In 2022, Draper Company discovered errors made in 2019-2021, itsfirst three years of operation.
| 2021 | 2020 | 2019 |
Items not recognized: | | | |
Prepaid expenses | $1,300 | $900 | $550 |
Accrued expenses | 950 | 700 | 800 |
Other information: | | | |
Reported net income | $23,000 | $25,000 | $20,000 |
Dividends declared and paid | 4,100 | 2,600 | 5,000 |
Common stock and additional paid in capital at12/31 | 22,000 | 17,000 | 15,000 |
Corrected 12/31/21 Total Equity will be:
Select one:
a. $78,450
b. $110,300
c. $77,950
d. $110,650
e. $78,650
