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During 2025, Saul Company discovered that the ending inventories reported on its financial statements were incorrect by the following amounts: 2023 $60,000 understated 2024 $75,000 understated Prior to any adjustments for these errors and ignoring income taxes, 2024 Net Income would be:

Respuesta :

Tundexi

Answer:

$15,000 overstated

Explanation:

       Item                                             Amount

Inventories over stated in 2024      $75,000

Less: Under stated in 2023              ($60,000)

Inventories over stated in 2025     $15,000

Overstated inventory means, cost of goods will be understated in income statement. so net income will show as overstated. it means retained earnings also overstated by $15,000

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