Solution-Calculate net income to be reported in income

Calculate net income to be reported in income statements

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Reference no: EM132656274

Problem - During its first four years of operation. Ivanhoe Co. reported the following net income.

2015 - $83,900

2016 - 143,000

2017 - 159,200

2018 - 254,100

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

1. In early 2018, Ivanhoe 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 - $2,200

2016 - 3,800

2017 - 5,400

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	$20,700	Overstatement
2017	$15,700	Understatement

Required - Calculate net income to be reported in Ivanhoe's comparative income statements for the years 2015 to 2018.

Reference no: EM132656274

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Calculate net income to be reported in income statements

Reference no: EM132656274

Reference no: EM132656274

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