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Sever21 [200]
3 years ago
12

Spartan Corporation discovered these errors in August of Year 3: Reported Net Income for Year 1 was $20,000. Reported Net Income

for Year 2 was $18,000. The correct Year 2 Net Income is:
Business
1 answer:
VLD [36.1K]3 years ago
6 0

Answer:

Net income year 2 = $21,300

Explanation:

I looked for the missing information and found this:

Year            Depreciation overstated         Prepaid expense omitted

1                              $2,500                                $2,000

2                             $4,000                                $2,700

If your question doesn't include the same values, just adjust the answer.

Year 2's net income = net income (year 2) + overstated depreciation (year 2) + omitted prepaid expenses (year 1) - omitted prepaid expenses (year 2) = $18,000 + $4,000 + $2,000 - $2,700 = $21,300

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