Activity 3: Preezy Corp has a reported net income of $50,000 in 2018 and $60,000...
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Activity 3: Preezy Corp has a reported net income of $50,000 in 2018 and $60,000 in 2019. The following potential errors happened during these two years. Calculate what his 2019 net income should be reported at if the errors got corrected. Assume for 2019 none of the 2018 errors were fixed when calculating the change and that Preezy uses a periodic system to calculate inventory. Also put down which permanent accounts would be changed and for what amounts for each year. 2018 1. Ending Inventory count is understated $3,000 2. An employee accidently recorded a purchases of $1,500 twice. 3. Preezy has $15,000 of inventory that was in the process of being shipped at year end to him with terms F.O.B. destination. He did not include it in his ending inventory count. 2019 1. Ending Inventory count is overstated $4,000 2. That same employee recorded another purchase twice, this time for $2,000. (he got fired) 3. At the end of the year inventory was in the process of being shipped again to him and it wasn't counted in the inventory count. This time it was worth $10,000 with terms F.O.B. shipping point
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