The 2016 and 2017 Financial Statements for Angelica Company Had

The 2016 and 2017 financial statements for Angelica Company had the following errors:
· Ending inventory was overstated by $8,000 on December 31, 2016, and overstated by
$5,000 on December 31, 2017.
· A five-year insurance policy costing $20,000 was charged to expense when paid in advance on January 1, 2016.
· Depreciation expense of $12,000 on new equipment was omitted from the 2016 financial statements.
· Major improvements to Angelica's manufacturing plant costing $25,000 were charged to expense in 2016 and should have been capitalized. Consequently, annual depreciation expense of $2,500 was omitted from the 2016 and 2017 financial statements.
· Wages of $7,000 earned in 2016 but not paid until 2017 were recorded as an expense in
2017 instead of 2016.
Angelica Company had reported net income of $90,000 in 2016 and $95,000 in 2017.
Required:
Prepare a schedule to determine the correct net income for 2016 and 2017. Begin the schedule with reported net income for 2016 and 2017 and work to a corrected figure. Ignore income taxes.