Cato, Inc. is a calendar-year corporation whose financial statements for 2009 and 2010 included errors as follows:
Year Ending Inventory Depreciation Expense
2009 $162,000 overstated $135,000 overstated
2010 54,000 understated 45,000 understated
Assume that purchases were recorded correctly and that no correcting entries were made at December 31, 2009, or at December 31, 2010. Ignoring income taxes, by how much should Cato's retained earnings be retroactively adjusted at January 1, 2011?
Click here for the solution: Cato, Inc. is a calendar-year corporation whose financial statements for 2009 and 2010 included errors as follows
