1. Revise these statements of earnings to reflect the correct amounts. (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) Sales revenue Cost of sales Gross profit Operating expenses Pretax earnings Income tax expense Net earnings Not affected Affected 2023 2022 PRUITT COMPANY Corrected Statement of Earnings 2024 2023 $ $ Overstatement Understatement 3,325 $ 2,155 1,170 620 550 165 385 Income tax expense 3,750 2,325 1,425 643 782 $ 2022 2. Did the error affect the cumulative net earnings for the four-year period? 4,000 2,384 1,616 668 948 $ $ 3. What effect did the error have on the income tax expense for 2022 and 2023? (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) 2021 4,275 2,763 1,512 672 840 252 588 The statements of earnings for Pruitt Company summarized for a four-year period show the following (amounts in thousands of dollars): Sales revenue Cost of sales Gross profit Operating expenses Pretax earnings Income tax expense (30%) Net earnings 2024 $3,325 2,155 1,170 620 550 165 $ 385 2023 2022 $3,750 $4,000 2,277 2,432 1,473 1,568 643 668 830 900 249 270 581 $ 630 $ 2021 $4,275 2,763 1,512 672 840 252 $ 588 An audit revealed that in determining these amounts, the ending inventory for 2022 was understated by $48.
1. Revise these statements of earnings to reflect the correct amounts. (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) Sales revenue Cost of sales Gross profit Operating expenses Pretax earnings Income tax expense Net earnings Not affected Affected 2023 2022 PRUITT COMPANY Corrected Statement of Earnings 2024 2023 $ $ Overstatement Understatement 3,325 $ 2,155 1,170 620 550 165 385 Income tax expense 3,750 2,325 1,425 643 782 $ 2022 2. Did the error affect the cumulative net earnings for the four-year period? 4,000 2,384 1,616 668 948 $ $ 3. What effect did the error have on the income tax expense for 2022 and 2023? (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) 2021 4,275 2,763 1,512 672 840 252 588 The statements of earnings for Pruitt Company summarized for a four-year period show the following (amounts in thousands of dollars): Sales revenue Cost of sales Gross profit Operating expenses Pretax earnings Income tax expense (30%) Net earnings 2024 $3,325 2,155 1,170 620 550 165 $ 385 2023 2022 $3,750 $4,000 2,277 2,432 1,473 1,568 643 668 830 900 249 270 581 $ 630 $ 2021 $4,275 2,763 1,512 672 840 252 $ 588 An audit revealed that in determining these amounts, the ending inventory for 2022 was understated by $48.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Income tax expense for 2023 isn't 230 and 2022 isn't 289 . Net earning for 2023 isn't 552 and 2022 isn't 659. Find oversatement of 2023 and understatement of 2022 aka question 3
Transcribed Image Text:1. Revise these statements of earnings to reflect the correct amounts. (Do not round intermediate calculations. Round the final
answers to the nearest dollar amount.)
Sales revenue
Cost of sales
Gross profit
Operating expenses
Pretax earnings
Income tax expense
Net earnings
Not affected
Affected
2023
2022
PRUITT COMPANY
Corrected Statement of Earnings
2024
2023
$
$
Overstatement
Understatement
3,325 $
2,155
1,170
620
550
165
385
Income tax expense
3,750
2,325
1,425
643
782
$
2022
2. Did the error affect the cumulative net earnings for the four-year period?
4,000
2,384
1,616
668
948
$
$
3. What effect did the error have on the income tax expense for 2022 and 2023? (Do not round intermediate calculations. Round the
final answers to the nearest dollar amount.)
2021
4,275
2,763
1,512
672
840
252
588
Transcribed Image Text:The statements of earnings for Pruitt Company summarized for a four-year period show the following (amounts in thousands of
dollars):
Sales revenue
Cost of sales
Gross profit
Operating expenses
Pretax earnings
Income tax expense (30%)
Net earnings
2024
$3,325
2,155
1,170
620
550
165
$ 385
2023
2022
$3,750
$4,000
2,277
2,432
1,473
1,568
643
668
830
900
249
270
581 $ 630
$
2021
$4,275
2,763
1,512
672
840
252
$ 588
An audit revealed that in determining these amounts, the ending inventory for 2022 was understated by $48.
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