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In 2022, Draper Company discovered errors made in 2019-2021, its first three years of operation. 2021 2020 2019 Items not...

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Accounting

In 2022, Draper Company discovered errors made in 2019-2021, itsfirst three years of operation.

2021

2020

2019

Items not recognized:

Prepaid expenses

$1,300

$900

$550

Unearned Revenues

950

700

800

Other information:

Reported net income

$23,000

$25,000

$20,000

Dividends declared and paid

4,100

2,600

5,000

Common stock and additional paid in capital at12/31

22,000

17,000

15,000

Indicate the error in 12/31/21 RetainedEarnings:

Select one:

a. $400 overstated

b. $350 overstated

c. $400 understated

d. $350 understated

e. $550 understated

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Question text

In 2022, Draper Company discovered errors made in 2019-2021, itsfirst three years of operation.

2021

2020

2019

Items not recognized:

Prepaid expenses

$1,300

$900

$550

Accrued expenses

950

700

800

Other information:

Reported net income

$23,000

$25,000

$20,000

Dividends declared and paid

4,100

2,600

5,000

Common stock and additional paid in capital at12/31

22,000

17,000

15,000

Corrected 12/31/21 Total Equity will be:

Select one:

a. $78,450

b. $110,300

c. $77,950

d. $110,650

e. $78,650

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