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Prepare corrected income statements for both years

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Reference no: EM132488157

Bruin Co. is disturbed about the trend reflected in its 2017 and 2018 income statements:

                                              2017                 2018

Sales........................     $100,000        $120,000

Cost of goods sold.......... (50,000)          (65,000)

Gross profit..................   50,000             55,000

Operating expenses......... (30,000)         (40,000)

Net income...................    20,000          15,000

1. Bruin has discovered that its 2017 ending inventory was overstated by $10,000.

Question 1: Prepare corrected income statements for both years. Comment on the trend reflected in Bruin's corrected income statements.

Reference no: EM132488157

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