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In early 2026, auditors found that the ending merchandise inventory for 2023 was understated by $7.000 and that the ending merchandise inventory for 2025 was overstated by $8,000. The ending merchandise inventory at December 31, 2024, was correct Read the requirements. Requirement 1. Prepare corrected income statements for the three years Waterlily Carpets Income Statement For the Years Ended December 31, 2025, 2024, and 2023 2024 Net Sales Revenue Cost of Goods Sold Beginning Merchandise Inventory Plus Net Cost of Inventory Purchased Cost of Goods Available for Sale Less Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income 2025 Ending Merchandise Inventory Overstated by $8,000 IIII Correct 2023 Ending Merchandise Inventory Understated by $7,000 Data table Net Sales Revenue Cost of Goods Sold Beginning Merchandise Inventory Plus: Net Cost of Inventory Purchased Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income 4 2025 $ 214,000 $ 23,000 137,000 160,000 35,000 Print 125,000 89,000 65,000 $ 24,000 2024 $ 26,000 103,000 129,000 23,000 Done $ 162,000 106,000 56,000 29,000 $ 27,000 $ 2023 39,000 88.000 127,000 26,000 $ 170,000 S 101,000 69,000 29,000 40,000

In early 2026, auditors found that the ending merchandise inventory for 2023 was understated by $7.000 and that the ending merchandise inventory for 2025 was overstated by $8,000. The ending merchandise inventory at December 31, 2024, was correct Read the requirements. Requirement 1. Prepare corrected income statements for the three years Waterlily Carpets Income Statement For the Years Ended December 31, 2025, 2024, and 2023 2024 Net Sales Revenue Cost of Goods Sold Beginning Merchandise Inventory Plus Net Cost of Inventory Purchased Cost of Goods Available for Sale Less Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income 2025 Ending Merchandise Inventory Overstated by $8,000 IIII Correct 2023 Ending Merchandise Inventory Understated by $7,000 Data table Net Sales Revenue Cost of Goods Sold Beginning Merchandise Inventory Plus: Net Cost of Inventory Purchased Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income 4 2025 $ 214,000 $ 23,000 137,000 160,000 35,000 Print 125,000 89,000 65,000 $ 24,000 2024 $ 26,000 103,000 129,000 23,000 Done $ 162,000 106,000 56,000 29,000 $ 27,000 $ 2023 39,000 88.000 127,000 26,000 $ 170,000 S 101,000 69,000 29,000 40,000

FINANCIAL ACCOUNTING
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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Waterlily Carpets' books show the following data. (Click the icon to view the income statements.) In early 2026, auditors found that the ending merchandise inventory for 2023 was understated by $7,000 and that the ending merchandise inventory for 2025 was overstated by $8,000. The ending merchandise inventory at December 31, 2024, was correct Read the requirements. Requirement 1. Prepare corrected income statements for the three years. Waterlily Carpets Income Statement For the Years Ended December 31, 2025, 2024, and 2023 2024 Net Sales Revenue Cost of Goods Sold Beginning Merchandise Inventory Plus: Net Cost of Inventory Purchased Cost of Goods Available for Sale Less Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income 2025 Ending Merchandise Inventory Overstated by $8,000 Correct 2023 Ending Merchandise Inventory Understated by $7,000 Wor Data table Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory Plus: Net Cost of Inventory Purchased Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income K 2025 $ 23,000 137,000 160,000 35,000 Print $ 214,000 $ 125,000 89,000 65,000 24,000 2024 $ 26,000 103,000 Done 129,000 23,000 $ 162,000 S 106,000 56,000 29,000 27,000 2023 $ $ 39,000 88,000 127,000 26,000 $ 170,000 101,000 69,000 29,000 40,000
Transcribed Image Text:Waterlily Carpets' books show the following data. (Click the icon to view the income statements.) In early 2026, auditors found that the ending merchandise inventory for 2023 was understated by $7,000 and that the ending merchandise inventory for 2025 was overstated by $8,000. The ending merchandise inventory at December 31, 2024, was correct Read the requirements. Requirement 1. Prepare corrected income statements for the three years. Waterlily Carpets Income Statement For the Years Ended December 31, 2025, 2024, and 2023 2024 Net Sales Revenue Cost of Goods Sold Beginning Merchandise Inventory Plus: Net Cost of Inventory Purchased Cost of Goods Available for Sale Less Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income 2025 Ending Merchandise Inventory Overstated by $8,000 Correct 2023 Ending Merchandise Inventory Understated by $7,000 Wor Data table Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory Plus: Net Cost of Inventory Purchased Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income K 2025 $ 23,000 137,000 160,000 35,000 Print $ 214,000 $ 125,000 89,000 65,000 24,000 2024 $ 26,000 103,000 Done 129,000 23,000 $ 162,000 S 106,000 56,000 29,000 27,000 2023 $ $ 39,000 88,000 127,000 26,000 $ 170,000 101,000 69,000 29,000 40,000
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