Which amounts should be reported as prior-period adjustments

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Problem

While preparing its 20Y3 financial statements, Falfact Corp. discovered computational errors in its 20Y2 and 20Y1 depreciation expense. These errors resulted in overstatement of each year's income by P25,000, net of income taxes. The following amounts were reported in the previously issued financial statements: Retained earnings, 1/1 20Y2 P 700,000 20Y1 P 500,000 Net income Retained earnings, 12/31 150,000 P 850,000 200,000 P 700,000 Falfact's 20Y3 net income is correctly reported at P180,000. Get the instant assignment help. Which amounts should be reported as prior-period adjustments and net income in Falfact's 20Y3 and 20Y2 comparative financial statements?

Reference no: EM134007235

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