What is the error in total net income

Assignment Help Financial Accounting
Reference no: EM132494154

A company's financial statement is shown below (figure A). They were doing a count of their inventory and discovered that they understated year 1's inventory by $62000 and overstated year 2's by $32000. Figure B shows the adjustments used to correct the reported amounts.

Question 1: What is the error in total net income for the combined three-year period resulting from the inventory errors?

For Year Ended December

31     Year 1

Year 2

 

Year 3

(a)           

Cost of goods sold

$      737,000

$  967,000

$

802,000

(b)           

Net income

280,000

287,000

 

262,000

(c)           

Total current assets

1,259,000

1,372,000

 

1,242,000

(d)           

Total equity

1,399,000

1,592,000

 

1,257,000

Cost of goods sold:

lar______________ 0

 

 

 

Reported amount

 

$      737,000 0

$       967,000 0

$     802,000 0

Adjustments for:

12/31/Year 1 error

(62,000) 0

62,000 0

0 0

 

12/31/Year 2 error

of)

32,000 0

(32,000) 0

Corrected amount

 

$        675,000

$    1,061,000

$     770,000

Net income: 1W

 

 

 

 

Reported amount

 

$     280,000 0

$    287,000 Q

$     262,000 0

Adjustments for:

12/31/Year 1 error

62,000 0

(62,000) 0

00

 

12/31/Year 2 error

0 0

(32,000) 0

32,000 0

Corrected amount

 

$     342,000

$     193,000

$     294,000

Total current fflssets:

 

 

 

 

Reported amount

 

$ 1,259,000 0

$ 1,372,000 0

$ 1,242,000 0

Adjustments for:

12/31/Year 1 error

62,000 0

00

00

 

12/31/Year 2 error

0 0

(32,000) 0

00

Corrected amount

 

$    1,321 000

$    1,340 000

$    1,242 000

Equity:

 

 

 

 

Reported amount

 

$ 1,399,000 0

$ 1,592,000 0

$ 1,257,000 0

Adjustments for:

12/31/Year 1 error

62,000 0

0 0

00

 

12/31/Year 2 error

0 0

(32,000) 0

of)

Corrected amount

 

$    1,461 000

$    1,560,000

$ 1,257 000

Reference no: EM132494154

Questions Cloud

Array representation of the obtained heap : What is the array representation of the obtained heap? Show the result of performing 3 deleteMax operation in the resulting heap
Prepare journal entries for any year-end adjustments : Prepare the journal entries for these transactions and any year-end adjustments. Windsor Co. had purchased 190 shares of Washington Co
What is the cost of goods sold for julia and company : What is the cost of goods sold for Julia & Company assuming it uses LIFO? (Do not round your intermediate calculations. Round your answer to the nearest)
How much would save by transferring the credit card debt : Determine How much would his monthly repayments to the credit card company be if he intended to pay out the debt over five years?
What is the error in total net income : A company's financial statement, What is the error in total net income for the combined three-year period resulting from the inventory errors?
What is the difference between emulation : 1. What Is The Difference Between Emulation, Native Virtualization, And Para Virtualization?
Take a new record from the user for a new student : Add a new record - take a new record from the user for a new student. Be careful, you may need to allocate more memory using dynamic memory allocation.
Draw the heap that results from inserting : Draw the heap that results from inserting 10, 12, 1, 14, 3, 17, 7, 2, 5, 8, 6 and 70 (in that order) into an initially empty binary max heap.
Create two variables ttlproblems : For this project, you will make a program that will test the user's proficiency at solving different types of math problems. The program will be menu driven.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Calculate the book value at the end of year

Calculate the book value at the end of year. A machine that cost$136,000 has an estimated residual value of $8,000 and an estimated useful life of 8 years.

  Is this function homogeneous in k and l

Is this function homogeneous in K and L?In the long-run, does it exhibit increasing, constant, or decreasing returns to scale?

  Individual research variables and suspects possible effects

A researcher has collected data on five individual research variables and suspects possible effects or associations among the the variables (but is not sure which ones). Devise and discuss a viable research strategy so that the researchers may system..

  What the ending balance of retained earnings would be?

All other expenses totaled? $12,000. The company declared and paid? $27,000 as dividends. What The ending balance of Retained Earnings would be?

  Compute the adjusted gross income and taxable income

Compute: 1) Adjusted Gross Income, 2) Taxable Income, 3) Tax Owed or Refunded?

  Prepare a bank reconciliation analysis

What principles of internal control wePrepare a 700-word bank reconciliation analysis re violated in this case - Prepare a 700-word bank reconciliation analysis

  Make the ad campaign as acttractive as the ordering system

An Arrow product typically earn a contribution margin ratio of 25 percent and has current fixed costs of $80,000. for each option, how much will projected operating income increase or drecrease relative to initial predictions? by what percentage woul..

  Compute the companys cash flow yield and cash flows to sales

Using the data from the financial statements of Stanford, Inc., that follow, compute the company's cash flow yield, cash flows to sales, cash flows to assets, and free cash flow.

  Determine the amounts of each account after the stock

Determine the amounts of each account after the stock dividend was distributed - Common Stock Additional paid in capital

  Determine the fair presentation of ajax chemical balance

Evaluate the policies and procedures of the Food and Drug Administration in terms of bringing new drugs to market. Determine the fair presentation of Ajax Chemical’s balance sheet, income statement, and statement of cash flows.

  Calculate cost of goods available for sale-ending inventory

In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following order: (1) 150 units at $7 on January 1, (2) 590 units at $8 on January 8, and (3) 890 units at $10 on January 29. Assume 1,1..

  A check is not negotiable

A check is NOT negotiable if it:

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd