First Quarter $ 18,000 $ 21,600 Sales Revenue Cost of Goods Sold Beginning Inventory Purchases $ 3,600 7,600 $4,600 12,600 Goods Available for Sale 11, 200 17,200 Ending Inventory 4,600 9,600 Cost of Goods Sold Gross Profit 6,600 7,600 14,000 11,400 5,600 Operating Expenses 6,600 Income from Operations $ 5,800 $ 7,400 During the third quarter, the company's internal auditors discovered that the ending inventory for the first quarter should have been $5,200. 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. Second Quarter
First Quarter $ 18,000 $ 21,600 Sales Revenue Cost of Goods Sold Beginning Inventory Purchases $ 3,600 7,600 $4,600 12,600 Goods Available for Sale 11, 200 17,200 Ending Inventory 4,600 9,600 Cost of Goods Sold Gross Profit 6,600 7,600 14,000 11,400 5,600 Operating Expenses 6,600 Income from Operations $ 5,800 $ 7,400 During the third quarter, the company's internal auditors discovered that the ending inventory for the first quarter should have been $5,200. 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. Second Quarter
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![First Quarter
Second Quarter
Sales Revenue
Cost of Goods Sold
$ 18,000
$ 21,600
$ 3,600
Beginning Inventory
Purchases
$ 4,600
7,600
12,600
Goods Available for Sale
11,200
17,200
Ending Inventory
4,600
9,600
Cost of Goods Sold
Gross Profit
6,600
11,400
5,600
7,600
14,000
6,600
Operating Expenses
Income from Operations
$ 5,800
$ 7,400
During the third quarter, the company's internal auditors discovered that the ending inventory for the first quarter should have been
$5,200. 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F50b6afa2-b780-4729-b5ef-4c5f15273615%2F67b5a415-0ced-4549-a8d0-e82677353d20%2F4tlhq1d_processed.jpeg&w=3840&q=75)
Transcribed Image Text:First Quarter
Second Quarter
Sales Revenue
Cost of Goods Sold
$ 18,000
$ 21,600
$ 3,600
Beginning Inventory
Purchases
$ 4,600
7,600
12,600
Goods Available for Sale
11,200
17,200
Ending Inventory
4,600
9,600
Cost of Goods Sold
Gross Profit
6,600
11,400
5,600
7,600
14,000
6,600
Operating Expenses
Income from Operations
$ 5,800
$ 7,400
During the third quarter, the company's internal auditors discovered that the ending inventory for the first quarter should have been
$5,200. 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.
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