Griffin Corporation prepared the following two income statements (simplified for illustrative purposes): 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 $5,300 3,900 9,200 4,800 $ 16,100 4,400 11,700 5,900 $ 5,800 Second Quarter $ 4,800 13,300 18,100 10,100 $21,600 8,000 13,600 6,400 $ 7,200 During the third quarter, it was discovered that the ending inventory for the first quarter should have been $5,290. Required: 1. What effect did this error have on the combined pretax income of the two quarters?

Griffin Corporation prepared the following two income statements (simplified for illustrative purposes): 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 $5,300 3,900 9,200 4,800 $ 16,100 4,400 11,700 5,900 $ 5,800 Second Quarter $ 4,800 13,300 18,100 10,100 $21,600 8,000 13,600 6,400 $ 7,200 During the third quarter, it was discovered that the ending inventory for the first quarter should have been $5,290. Required: 1. What effect did this error have on the combined pretax income of the two quarters?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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