Effects of errors on net income
Hummingbird Corp. began operations on January 1, 2019. Financial statements for 2019 and 2020 contained the following errors: In addition, on December 26, 2020, fully depreciated equipment was sold for $ 19,000, but the sale was not recorded until 2021. No corrections have been made for any of the errors.
Instructions
Ignoring income tax, show your calculation of the total effect of the errors on 2020 net income.

Question

Effects of errors on net income
Hummingbird Corp. began operations on January 1, 2019. Financial statements for 2019 and 2020 contained the following errors:  In addition, on December 26, 2020, fully depreciated equipment was sold for $ 19,000, but the sale was not recorded until 2021. No corrections have been made for any of the errors.
Instructions
Ignoring income tax, show your calculation of the total effect of the errors on 2020 net income.

Quizplus · Accepted Answer

The Answer of Effects of errors on net income
Hummingbird Corp. began operations on January 1, 2019. Financial statements for 2019 and 2020 contained the following errors:  In addition, on December 26, 2020, fully depreciated equipment was sold for $ 19,000, but the sale was not recorded until 2021. No corrections have been made for any of the errors.
Instructions
Ignoring income tax, show your calculation of the total effect of the errors on 2020 net income.

Effects of Errors on Net Income