inventory error-two years an Nature Foods Grocery reported the following comparative income statements for the Merchandise Inventor E6-24 Correcting years ended June 30, 2019 and 2018: Learning Objective 5 1. 2019, NI $36,500 NATURE FOODS GROCERY Income Statements Years Ended June 30, 2019 and 2018 2019 Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory Net Cost of Purchases Cost of Goods Available for Sale Less: Ending Merchandise Inventory 2018 $ 134,000 $ 119,000 $ 17,000 78,000 $ 14,000 95,000 67,000 18,000 81,000 17,000 Cost of Goods Sold 77,000 64,000 55,000 57,000 26,000 $ 31,000 Gross Profit Operating Expenses 21,000 $ 34,000 Net Income During 2019, Nature Foods Grocery discovered that ending 2018 merchandise inven- tory was overstated by $5,500. Requirements 1. Prepare corrected income statements for the two years. 2. State whether each year's net income-before your sorrections

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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years ended June 30, 2019 and 2018:
Cost of Goods Available for Sale
Nature Foods Grocery reported the following comparative income statements for the
Beginning Merchandise Inventory
Less: Ending Merchandise Inventory
During 2019, Nature Foods Grocery discovered that ending 2018 merchandise inven-
inventory error-two years
an
Merchandise Inventory 361
Learning Objective 5
1.2019, NI $36,500
NATURE FOODS GROCERY
Income Statements
Years Ended June 30, 2019 and 2018
2019
Net Sales Revenue
Cost of Goods Sold:
2018
$ 134,000
$ 119,000
$ 17,000
78,000
$ 14,000
67,000
81,000
Net Cost of Purchases
95,000
18,000
17,000
Cost of Goods Sold
77,000
64,000
57,000
Gross Profit
55,000
Operating Expenses
26,000
21,000
$ 31,000
Net Income
$ 34,000
tory was overstated by $5,500.
Requirements
1. Prepare corrected income statements for the two years.
2.
2 State whether each year's net income-before your corrections-is understated or
overstated, and indicate the amount of the understatement or overstatement.
Transcribed Image Text:years ended June 30, 2019 and 2018: Cost of Goods Available for Sale Nature Foods Grocery reported the following comparative income statements for the Beginning Merchandise Inventory Less: Ending Merchandise Inventory During 2019, Nature Foods Grocery discovered that ending 2018 merchandise inven- inventory error-two years an Merchandise Inventory 361 Learning Objective 5 1.2019, NI $36,500 NATURE FOODS GROCERY Income Statements Years Ended June 30, 2019 and 2018 2019 Net Sales Revenue Cost of Goods Sold: 2018 $ 134,000 $ 119,000 $ 17,000 78,000 $ 14,000 67,000 81,000 Net Cost of Purchases 95,000 18,000 17,000 Cost of Goods Sold 77,000 64,000 57,000 Gross Profit 55,000 Operating Expenses 26,000 21,000 $ 31,000 Net Income $ 34,000 tory was overstated by $5,500. Requirements 1. Prepare corrected income statements for the two years. 2. 2 State whether each year's net income-before your corrections-is understated or overstated, and indicate the amount of the understatement or overstatement.
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