Tom Inc. performs a physical inventory count on 12/31/2021 a…
Tom Inc. performs a physical inventory count on 12/31/2021 and accidentally double counts a room that has $35,000 of inventory in it (so the inventory in this room gets counted twice)! This mistake is not repeated when they perform the physical inventory count at the end of the following year (12/31/2022), which is done correctly. Assuming that Tom Inc. reports the following information on their 2021 and 2022 financial statements: As reported: 12/31/2021 12/31/2022 Ending Inventory $200,000 $300,000 Cost of Goods Sold $500,000 $450,000 Net Income $140,000 $170,000 Retained Earnings $500,000 $670,000 Please indicate what the corrected 2022 Retained Earnings total would be if the mistake had not been made?
Read Details