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Question -
Casillas, Inc. is a calendar-year corporation. Its financial statements for the years 2011 and 2010 contained errors as follows:
2011
2010
Ending Inventory
$3,000 overstated
$8,000 overstated
Depreciation Expense
$2,000 understated
$6,000 overstated
Assume that the proper correcting entries were made at December 31, 2010. By how much will 2011 income before taxes be overstated or understated?
Assume that no correcting entries were made at December 31, 2010. Ignoring income taxes, by how much will retained earnings at December 31, 2011 be overstated or understated?
What amount of total liabilities was reported on the December 31, 2013, balance sheet?
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