Assignment 4 - BBUS 3201 Assignment 4 July 8 2016 Q 1...

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BBUS 3201 Assignment 4 July 8, 2016 Q 1: Exercise 8 – 10 A) B) 2008 2009 2010 2011 2012 2013 Uncorrecte d Retained Earnings $50,000 $52,000 $54,000 $56,000 $58,000 $60,000 New Retained Earnings 45,000 38,000 56,000 67,000 60,000 52,000 Difference -5,000 -13,000 +2,000 +11,000 +2,000 -8,000 C) The original amounts recorded as Net Income before adjustments steadily increased by $2,000 every year. Although possible, I would definitely check into the amounts recognized as it is highly unlikely for a company to steadily increase by the same amount for 5 years. They may have altered their ending inventory balances to create a higher Net income than the previous year, perhaps to look good for potential investors. This is a criminal offence and you should never alter numbers on your financial statements to appear different than the actual amounts. 2008 2009 2010 2011 2012 2013 COGS: Beginning Inventory Ending Inventory - -$5,000 -$5,000 -$9,000 -$9,000 +$11,000 +$11,000 - - +$2,000 +$2,000 -$10,000 Net Income $45,000 $38,000 $56,000 $67,000 $60,000 $52,000
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Q 2 : Problem 8 – 3 A) 1. Inventory Accounts Payable Total Current Assets Total Current Liabilities Net Sales Initial Amounts $1,720,000 $1,300,000 $2,680,000 $1,550,000 $8,550,000 Adjustments (37,000) NONE (37,000) NONE 37,000 Adjusted Amounts $1,683,000 $1,300,000 $2,643,000 $1,550,000 $8,587,000 2.
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