Solution-What effect did the error have on the income tax

What effect did the error have on the income tax expense

Reference no: EM132437415

Question - The statements of earnings for Pruitt Company summarized for a four-year period show the following (amounts in thousands of dollars):

	2018	2017	2016	2015
Sales revenue	$4,025	$4,450	$4,700	$4,975
Cost of sales	2,505	2,627	2,782	3,113
Gross profit	1,520	1,823	1,918	1,862
Operating expenses	690	713	738	742
Pretax earnings	830	1,110	1,180	1,120
Income tax expense (40%)	332	444	472	448
Net earnings	$498	$666	$708	$672

An audit revealed that in determining these amounts, the ending inventory for 2016 was understated by $62.

Required -

1. Revise these statements of earnings to reflect the correct amounts.

2. What effect did the error have on the income tax expense for 2016 and 2017?

Reference no: EM132437415

Questions Cloud

How much is included in her gross estate : Suppose all of Mary's assets pass to her surviving husband. How much is included in her gross estate if the alternate valuation date is elected

Environmentally sustainable global economy : An environmentally sustainable global economy that limits the damage of climate change is a widely held goal.

The worst of the future climate change costs : What are some ideas that emerge from IPE that might help mitigate the worst of the future "climate change costs?"

Describe action plan for dealing with Lot in Life : Describe any obstacles or challenges that may prevent your plan of action from being successful.Describe action plan for dealing with Lot in Life

What effect did the error have on the income tax expense : An audit revealed that in determining these amounts, the ending inventory for 2016 was understated by $62. What effect did the error have on income tax expese

Fed monetary policy depend on the fiscal policy : Why might the Fed's monetary policy depend on the fiscal policy that is implemented? What type of organization issues commercial paper?

Discuss about wrapping things up : Has your impression of digital media and society changed after taking this class? How? What in your opinion is the future of digital media and the Internet?

Monetary policy affects the global economy : Analyze how U.S. monetary policy affects the global economy. If you were the financial manager of a business,

Describe the social media marketer : List at least two (2) things you have learned about each platform and discuss why you found them interesting and what they mean to as a social media marketer.

User Account

All Pages

What effect did the error have on the income tax expense

Reference no: EM132437415

Reference no: EM132437415

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT