Navajo Company's year-end financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Year 1 ending inventory is understated by $62,000 and Year 2 ending inventory is overstated by $32,000. For Year Ended December 31 (a) Cost of goods sold (b) Net income (c) Total current assets (d) Total equity Required: Year 1 $ 737,000 280,000 1,259,000 1,399,000 Year 2 $ 967,000 287,000 1,372,000 1,592,000 Year 3 $ 802,000 262,000 1,242,000 1,257,000 1. For each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts. 2. What is the total error in combined net income for the three-year period resulting from the inventory errors? Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts. Note: Amounts to be deducted must be entered with a minus sign. Cost of goods sold: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Net income: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Total current assets: Reported amount Year 1 Year 2 Year 3 Prev 9 of 9 Next >
Navajo Company's year-end financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Year 1 ending inventory is understated by $62,000 and Year 2 ending inventory is overstated by $32,000. For Year Ended December 31 (a) Cost of goods sold (b) Net income (c) Total current assets (d) Total equity Required: Year 1 $ 737,000 280,000 1,259,000 1,399,000 Year 2 $ 967,000 287,000 1,372,000 1,592,000 Year 3 $ 802,000 262,000 1,242,000 1,257,000 1. For each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts. 2. What is the total error in combined net income for the three-year period resulting from the inventory errors? Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts. Note: Amounts to be deducted must be entered with a minus sign. Cost of goods sold: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Net income: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Total current assets: Reported amount Year 1 Year 2 Year 3 Prev 9 of 9 Next >
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...
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