Aids Question 25 Not yet answered Points out of 300 F Flag q

Aids Question 25 Not yet answered Points out of 3.00 F Flag question During 2015, Passage Company discovered that the ending inventories reported on ts financial statements were incorrect by the following amounts Edition Chapter 2013 2014 $60,000 understated $75,000 overstated Pior to any adjustments for these errors, Retained Earnings at January 1, 2016 would be: k 2 3 ek 4 Select one e a Correct O b $75,000 overstated O c $15,000 overstated Od. S135,000 overstated O e $15,000 understated ek ek 6 ek 7

Solution

c. $15000 overstated .

year under/ over stated effect

2013 60000 understated decrease in profit

2014 75000 overstated increase in profit

Net effect = $75000 - $60000

= $15000 overstated in retained earnings balance