Question
Straightarm Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/24 and 12/31/25...
Straightarm Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/24 and 12/31/25 contained the following errors:
|
2024 |
2025 |
|
|
Ending inventory |
$15,000 understatement |
$24,000 overstatement |
|
Depreciation expense |
6,000 understatement |
12,000 understatement |
- Failed to record Unearned Revenue at 12/31/25: $7,000
- Straightarm declared a cash dividend of $11,000 on 12/31/25. No journal entry was made in 2025. The dividend was paid on 1/3/26; Straightarm debited Retained Earnings and credited Cash.
12/31/26 Retained Earnings is in error by:
Select one:
a. No error
b. $18,000
c. $12,000
d. $29,000
e. $21,000
Homework Answers
Answer #1
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