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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 Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter10: Forecasting Financial Statement
Section: Chapter Questions
Problem 5QE: Use the following hypothetical data for Walgreens in Years 11 and 12 to project revenues, cost of...
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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?
Transcribed Image Text: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?
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