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    Compute effect of error on earnings and RE

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    A bookkeeper prepared the year-end financial statements of Giftwrap, Inc. The income statement showed net income of $47,400, and the balance sheet showed ending retained earnings of $182,000. The firm's accountant reviewed the bookkeeper's work and determined that adjusting should be made that would increase revenues by $10,000, and decrease expenses by $16,800.

    Required:
    Calculate the amounts of net income and retained earnings after the preceding adjustments are recorded.

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    Solution Preview

    A bookkeeper prepared the year-end financial statements of Giftwrap, Inc. The income statement showed net income of $47,400, and the balance sheet showed ending retained earnings of $182,000. The firm's accountant ...

    Solution Summary

    The solution guides student using both columnar and T account methods.

    $2.19

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