Reference no: EM132574384

During its first four years of operation, Buffalo Co. reported the following net income.

2015 $88,800

2016 138,900

2017 168,100

2018 237,500

Buffalo is undergoing its first financial statement audit. The external auditors noted the following:

1. In early 2018, Buffalo Co. changed its estimate of bad debt expense from 2.5% of sales to 2.0% of sales. The company therefore adjusted its net income upward for 2015 through 2017 by the following amounts.

2015 $2,000

2016 4200

2017 5,700

2. The auditor discovered that ending inventory was misstated as indicated below for the years ending 2015 and 2017:

Year            Amount of misstatement         Direction of misstatement

2015           $19,900                              Overstatement

2017             $15,700                      Understatement

Question 1: Calculate net income to be reported in Buffalo's comparative income statements for the years 2015 to 2018.

net income:

2015:

2016:

2017:

2018: