In 2021, the controller of Sytec Corporation discovered that $74,000 of inventory purchases were incorrectly charged...

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In 2021, the controller of Sytec Corporation discovered that $74,000 of inventory purchases were incorrectly charged to adver

business accounting

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Answer 1

Answer #1

1. in 2020 year end closing inventory of $ 74,000 charged to expenses. Pulling down the retained earnings by $148,000

Also, Closing inventory missed counting of worth $46,000.

Therefore, the effect of errors on retained earnings 0n jan 1 2021 is that it is understated on the balance sheet by $148000+46000= $194,000.

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Answer 2

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