Answer:
Explanation:
Calculate the ending balance in stockholders' equity to be reported on the Balance Sheet.
Answer:
Explanation:
Required 1
determine the effect of the error on retained earnings at january1,2016;
in 2016, SE discovered that the expenses for advertising is $42000, it is an error caused by net purchase of inventory in the year 2015. the cost of goods sold for advertising expenses is overrated by $42000.
Therefore, the understatement advertising expense at ending inventory is $30000 held on consignment caused in 2015 is detected that the goods sold to be overstated.
check the attachment for analysis of 2015 ending inventory error effects.
REQUIRED 2 ( CHECK THE ATTACHMENT BELOW)
REQUIRED 3;
Determine the steps taken in connection with the correction of the error;
In 2015 the result for the financial statement was incorrect with two errors by restated. The correct inventory amount cost of goods sold, advertising expenses , net income and retained earnings are reported in comparative purpose to their current annual report.
a previous period adjustment for retained earnings is reported with disclosure note for the nature of error.
finally, the correction is made at the year earning for net income and extra ordinary item purchased. Therefore , a calculated share for each retained earnings is get reported.
<span>Definition of appropriate concept:
</span>1) efficiency - <span>when a society gets the most it can from its scarce resources.
2) </span><span>equality - when economic benefits are distributed uniformly across society.
</span>Efficiency is the size of the economic pie and equality is how the pie is divided into individual slices.
Answer:
By allowing the loans to the less creditworthy borrowers than this situation poses a moral hazard.
Explanation:
Moral hazard can be defined as a situation where one party ( who is insured ) takes more risks, which it has protection against, and the other party would be bear the risk.
In the given situation, a manager who sees that there is increase in federal deposit insurance coverage , has directed the loan officers to provide loans to the less creditworthy borrowers , now this decision of his poses a moral hazard because manager knows that by providing loan to such people, there are high chances of default on these loans and here manager is acting in a much more riskier way than he should be.