Homework Help is Here – Start Your Trial Now!
Business
Accounting
1. Show corrected income statements for each of the three years.

1. Show corrected income statements for each of the three years.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Complete requirement 1

ans) R. B. Video Sales Ltd. reported the following data. The shareholders are very happy with R. B.'s steady increase in net income. E (Click the icon to view the income statements.) Auditors discovered that the ending inventory for 2018 was understated by S2 million and that the ending inventory for 2019 was also understated by $2 million. The ending inventory at December 31, 2020, was correct Requirements 1. Show corrected income statements for each of the three years. 2. How much did these assumed corrections add to or take away from R. B.'s total net income over the three-year period? How did the corrections affect the trend of net income? 3. Will R. B's shareholders still be happy with the company's trend of net income? Give a reason for your answer. Requirement 1. Show corrected income statements for each of the three years. Income statements R. B. Video Sales Ltd. Income Statements (adapted, amounts in millions) Years Ended December 31, 2020, 2019, and 2018 R. B. Video Sales Ltd. Income Statements for the Years Ended 2020 2019 2018 Net sales revenue Amounts in millions) 2020 2019 2018 Cost of goods sold: Net sales revenue $ 43 40 24 37 Beginning inventory Cost of goods sold: Beginning inventory 14 13 12 Purchases 31 29 27 Purchases Goods available for sale Goods available for sale 45 42 39 Less: Ending inventory (15) (14) (13) Less: Ending inventory Cost of goods sold 30 28 26 Cost of goods sold Gross profit 13 12 11 Gross profit 8. 8. 8 Total operating expenses Total operating expenses 4. Net income Net income Print Done Enter any number in the edit fields and then click Check Answer. Clear All 3 parts remaining PNG .x Pik Yin Bec Canon IJ PD... Canon IJ Sca... File Explorer W Word 耳。 Google Chro... Type here to search ASUS 3, %24 %24 %24 %24 %24 %24
Transcribed Image Text:ans) R. B. Video Sales Ltd. reported the following data. The shareholders are very happy with R. B.'s steady increase in net income. E (Click the icon to view the income statements.) Auditors discovered that the ending inventory for 2018 was understated by S2 million and that the ending inventory for 2019 was also understated by $2 million. The ending inventory at December 31, 2020, was correct Requirements 1. Show corrected income statements for each of the three years. 2. How much did these assumed corrections add to or take away from R. B.'s total net income over the three-year period? How did the corrections affect the trend of net income? 3. Will R. B's shareholders still be happy with the company's trend of net income? Give a reason for your answer. Requirement 1. Show corrected income statements for each of the three years. Income statements R. B. Video Sales Ltd. Income Statements (adapted, amounts in millions) Years Ended December 31, 2020, 2019, and 2018 R. B. Video Sales Ltd. Income Statements for the Years Ended 2020 2019 2018 Net sales revenue Amounts in millions) 2020 2019 2018 Cost of goods sold: Net sales revenue $ 43 40 24 37 Beginning inventory Cost of goods sold: Beginning inventory 14 13 12 Purchases 31 29 27 Purchases Goods available for sale Goods available for sale 45 42 39 Less: Ending inventory (15) (14) (13) Less: Ending inventory Cost of goods sold 30 28 26 Cost of goods sold Gross profit 13 12 11 Gross profit 8. 8. 8 Total operating expenses Total operating expenses 4. Net income Net income Print Done Enter any number in the edit fields and then click Check Answer. Clear All 3 parts remaining PNG .x Pik Yin Bec Canon IJ PD... Canon IJ Sca... File Explorer W Word 耳。 Google Chro... Type here to search ASUS 3, %24 %24 %24 %24 %24 %24
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Capital Gains and Losses
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS