Dallas Corporation prepared the following two income statements: First Quarter Sales Revenue $ 24,500 Second Quarter $ 29,400 Cost of Goods Sold Beginning Inventory $ 4,900 $ 5,900 Purchases 8,900 13,900 Goods Available for Sale 13,800 19,800 Ending Inventory 5,900 10,900 Cost of Goods Sold Gross Profit Operating Expenses Income from Operations 7,900 16,600 6,900 $ 9,700 8,900 20,500 7,900 $ 12,600 During the third quarter, the company's internal auditors discovered that the ending inventory for the first quarter should have been $7,150. The ending inventory for the second quarter was correct. Required: 1. What effect would the error have on total Income from Operations for the two quarters combined? 2. What effect would the error have on Income from Operations for each of the two quarters? 3. Prepare corrected income statements for each quarter. Ignore income taxes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What effect would the error have on total Income from Operations for the two quarters combined? Two Quarters Combined Income from Operations Overstated by ☐
Dallas Corporation prepared the following two income statements: First Quarter Sales Revenue $ 24,500 Second Quarter $ 29,400 Cost of Goods Sold Beginning Inventory $ 4,900 $ 5,900 Purchases 8,900 13,900 Goods Available for Sale 13,800 19,800 Ending Inventory 5,900 10,900 Cost of Goods Sold Gross Profit Operating Expenses Income from Operations 7,900 16,600 6,900 $ 9,700 8,900 20,500 7,900 $ 12,600 During the third quarter, the company's internal auditors discovered that the ending inventory for the first quarter should have been $7,150. The ending inventory for the second quarter was correct. Required: 1. What effect would the error have on total Income from Operations for the two quarters combined? 2. What effect would the error have on Income from Operations for each of the two quarters? 3. Prepare corrected income statements for each quarter. Ignore income taxes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What effect would the error have on total Income from Operations for the two quarters combined? Two Quarters Combined Income from Operations Overstated by ☐
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Dallas Corporation prepared the following two income statements:
First Quarter
Sales Revenue
$ 24,500
Second Quarter
$ 29,400
Cost of Goods Sold
Beginning Inventory
$ 4,900
$ 5,900
Purchases
8,900
13,900
Goods Available for Sale
13,800
19,800
Ending Inventory
5,900
10,900
Cost of Goods Sold
Gross Profit
Operating Expenses
Income from Operations
7,900
16,600
6,900
$ 9,700
8,900
20,500
7,900
$ 12,600
During the third quarter, the company's internal auditors discovered that the ending inventory for the first quarter should have been
$7,150. The ending inventory for the second quarter was correct.
Required:
1. What effect would the error have on total Income from Operations for the two quarters combined?
2. What effect would the error have on Income from Operations for each of the two quarters?
3. Prepare corrected income statements for each quarter. Ignore income taxes.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
What effect would the error have on total Income from Operations for the two quarters combined?
Two Quarters Combined
Income from Operations Overstated by
☐
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