Secure h com owiconnect.htm [required] Homework (ch 6 6 Help Save&ExltSubmit; Ch

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Secure h com owiconnect.htm [required] Homework (ch 6 6 Help Save&ExltSubmit; Check my 4 Problem 6-6A Analysis of inventory errors LO A2 Navajo Company's financial statements show the following. The company recently discovered that in making physical counts of Inventory, t had made the following erors: Inventory on December 31, 2016, is understated by $56,000, and inventory on December 31, 2017, is overstated by $20,000. 285,000 1,255,00 1,365,00 Required 1 Foreach key financial statement figure 4 a and a bei e prepare a table to show the ad ust mets reported amounts 2. What is the error in total net income for the combined three-year period resuting from the Inventory errors? e esay to co ed the Complete this questions by entering your answers in the below tabs Requred 1 Required 2

Explanation / Answer

A,

B. There is no error in Total net income reported for three years togethr. Error has compesating effect and offeseted the difference in each year.

For Year Ended December 31 2016 2017 2018 a Cost of Goods Sold Reported Amount 415000 957000 780000 Adjustent for 2016 Error -56000 56000 2017 Error 20000 -20000 Corrected Aount 359000 1033000 760000 b Net income Reported Amount 230000 285000 241000 756000 Adjustent for 2016 Error 56000 -56000 2017 Error -20000 20000 Corrected Aount 286000 209000 261000 756000 c Total Current assets Reported Amount 1255000 1365000 1200000 Adjustent for 2016 Error 56000 -56000 2017 Error -20000 20000 Corrected Aount 1311000 1289000 1220000 d Total equity Reported Amount 1387000 1530000 1242000 Adjustent for 2016 Error 56000 -56000 2017 Error -20000 20000 Corrected Aount 1443000 1454000 1262000

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