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First Quarter Griffin Corporation prepared the following two income statements (simplified for illustrative purposes) Sales revenue Second Quarter $ 14,600 $20,100 Cost of goods sold Beginning inventory $ 4,800 $ 4,300 Purchases 3,400 Goods available for sale 8,200 12,888 17,100 Ending inventory 4,300 9,600 Cost of goods sold 3,900 7,500 Gross profit 10,700 12,600 Expenses Pretax income 5,400 $5,300 5,908 $6,700 During the third quarter, it was discovered that the ending inventory for the first quarter should have been $4,940. Required: 1. What effect did this error have on the combined pretax income of the two quarters? 2. Which quarter's or quarters' (if any) EPS amounts were affected by this error? 3. Prepare corrected income statements for each quarter. 4. Prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What effect did this error have on the combined pretax income of the two quarters? Effect on combined pretax income Required 1 Required 2 Required 3 Required 4 Which quarter's or quarters (if any) EPS amounts were affected by this error? Quarter(s) Required 1 Required 2 Required 3 Required 4 Prepare corrected income statements for each quarter. Sales revenue Cost of goods sold: Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross profit Expenses Pretax income First Quarter Second Quarter Required 1 Required 2 Required 3 Required 4 Prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement. Beginning inventory Ending inventory Cost of goods sold Gross profit Pretax income Incorrect 1st Quarter Correct Error Incorrect 2nd Quarter Correct Error $ 4,800 $ 4.300 3,900 10,700 5.300 $ 640 640 640 640 4,300 9.600 640 640 640 6.700 640 7,500 12.600

First Quarter Griffin Corporation prepared the following two income statements (simplified for illustrative purposes) Sales revenue Second Quarter $ 14,600 $20,100 Cost of goods sold Beginning inventory $ 4,800 $ 4,300 Purchases 3,400 Goods available for sale 8,200 12,888 17,100 Ending inventory 4,300 9,600 Cost of goods sold 3,900 7,500 Gross profit 10,700 12,600 Expenses Pretax income 5,400 $5,300 5,908 $6,700 During the third quarter, it was discovered that the ending inventory for the first quarter should have been $4,940. Required: 1. What effect did this error have on the combined pretax income of the two quarters? 2. Which quarter's or quarters' (if any) EPS amounts were affected by this error? 3. Prepare corrected income statements for each quarter. 4. Prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What effect did this error have on the combined pretax income of the two quarters? Effect on combined pretax income Required 1 Required 2 Required 3 Required 4 Which quarter's or quarters (if any) EPS amounts were affected by this error? Quarter(s) Required 1 Required 2 Required 3 Required 4 Prepare corrected income statements for each quarter. Sales revenue Cost of goods sold: Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross profit Expenses Pretax income First Quarter Second Quarter Required 1 Required 2 Required 3 Required 4 Prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement. Beginning inventory Ending inventory Cost of goods sold Gross profit Pretax income Incorrect 1st Quarter Correct Error Incorrect 2nd Quarter Correct Error $ 4,800 $ 4.300 3,900 10,700 5.300 $ 640 640 640 640 4,300 9.600 640 640 640 6.700 640 7,500 12.600

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter5: Accounting For Retail Businesses
Section: Chapter Questions
Problem 41E: Cost of goods sold and related items The following data were extracted from the accounting records...
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First Quarter Griffin Corporation prepared the following two income statements (simplified for illustrative purposes) Sales revenue Second Quarter $ 14,600 $20,100 Cost of goods sold Beginning inventory $ 4,800 $ 4,300 Purchases 3,400 Goods available for sale 8,200 12,888 17,100 Ending inventory 4,300 9,600 Cost of goods sold 3,900 7,500 Gross profit 10,700 12,600 Expenses Pretax income 5,400 $5,300 5,908 $6,700 During the third quarter, it was discovered that the ending inventory for the first quarter should have been $4,940. Required: 1. What effect did this error have on the combined pretax income of the two quarters? 2. Which quarter's or quarters' (if any) EPS amounts were affected by this error? 3. Prepare corrected income statements for each quarter. 4. Prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What effect did this error have on the combined pretax income of the two quarters? Effect on combined pretax income Required 1 Required 2 Required 3 Required 4 Which quarter's or quarters (if any) EPS amounts were affected by this error? Quarter(s) Required 1 Required 2 Required 3 Required 4 Prepare corrected income statements for each quarter. Sales revenue Cost of goods sold: Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross profit Expenses Pretax income First Quarter Second Quarter <Required 2 Required 4 > Required 1 Required 2 Required 3 Required 4 Prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement. Beginning inventory Ending inventory Cost of goods sold Gross profit Pretax income Incorrect 1st Quarter Correct Error Incorrect 2nd Quarter Correct Error $ 4,800 $ 4.300 3,900 10,700 5.300 $ 640 640 640 640 4,300 9.600 640 640 640 6.700 640 <Required 3 Required 4 > 7,500 12.600
Transcribed Image Text:First Quarter Griffin Corporation prepared the following two income statements (simplified for illustrative purposes) Sales revenue Second Quarter $ 14,600 $20,100 Cost of goods sold Beginning inventory $ 4,800 $ 4,300 Purchases 3,400 Goods available for sale 8,200 12,888 17,100 Ending inventory 4,300 9,600 Cost of goods sold 3,900 7,500 Gross profit 10,700 12,600 Expenses Pretax income 5,400 $5,300 5,908 $6,700 During the third quarter, it was discovered that the ending inventory for the first quarter should have been $4,940. Required: 1. What effect did this error have on the combined pretax income of the two quarters? 2. Which quarter's or quarters' (if any) EPS amounts were affected by this error? 3. Prepare corrected income statements for each quarter. 4. Prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What effect did this error have on the combined pretax income of the two quarters? Effect on combined pretax income Required 1 Required 2 Required 3 Required 4 Which quarter's or quarters (if any) EPS amounts were affected by this error? Quarter(s) Required 1 Required 2 Required 3 Required 4 Prepare corrected income statements for each quarter. Sales revenue Cost of goods sold: Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross profit Expenses Pretax income First Quarter Second Quarter <Required 2 Required 4 > Required 1 Required 2 Required 3 Required 4 Prepare the schedule to reflect the comparative effects of the correct and incorrect amounts on the income statement. Beginning inventory Ending inventory Cost of goods sold Gross profit Pretax income Incorrect 1st Quarter Correct Error Incorrect 2nd Quarter Correct Error $ 4,800 $ 4.300 3,900 10,700 5.300 $ 640 640 640 640 4,300 9.600 640 640 640 6.700 640 <Required 3 Required 4 > 7,500 12.600
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