Navajo Company's year end financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Year 1 ending inventory is understated by $66,000 and Year 2 ending inventory is overstated by $36.000 For Year Ended December 31 (a) Cost of goods sold (b) Net Income (c) Total current assets (4) Total equity Required: 1. For each key financial statement figure-( ( (d, and (d) above-prepare a table to show the adjustments necessary to comect the reported amounts 2. What is the total error in combined net income for the three-year period resulting from the inventory errors? Coal of goods Reported out Aument for 1291/1 Aument for 12/31/2 Conected amount Net ecome Reported amount Aumento 12311 Aument for 12 Conected out Year 1 $ 741,000 204,000 1,263,000 1,483,000 Complete this question by entering your answers in the tabs below. Reported amount Aument Autart 12012 Conected amount Early Year 2 $971,000 291,000 1,376,000 1,596,000 Required 1 Required 2 for each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts (Amounts to be deducted must with a minus sign) Tam Year 3 $80,000 266,000 1,246,000 1,261,000 Art for 1291 Aument for 12/31/2 < Prev
Navajo Company's year end financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Year 1 ending inventory is understated by $66,000 and Year 2 ending inventory is overstated by $36.000 For Year Ended December 31 (a) Cost of goods sold (b) Net Income (c) Total current assets (4) Total equity Required: 1. For each key financial statement figure-( ( (d, and (d) above-prepare a table to show the adjustments necessary to comect the reported amounts 2. What is the total error in combined net income for the three-year period resulting from the inventory errors? Coal of goods Reported out Aument for 1291/1 Aument for 12/31/2 Conected amount Net ecome Reported amount Aumento 12311 Aument for 12 Conected out Year 1 $ 741,000 204,000 1,263,000 1,483,000 Complete this question by entering your answers in the tabs below. Reported amount Aument Autart 12012 Conected amount Early Year 2 $971,000 291,000 1,376,000 1,596,000 Required 1 Required 2 for each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts (Amounts to be deducted must with a minus sign) Tam Year 3 $80,000 266,000 1,246,000 1,261,000 Art for 1291 Aument for 12/31/2 < Prev
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:2:32
Navajo Company's year-end financial statements show the following. The company recently discovered that in making physical counts
of inventory, it had made the following errors: Year 1 ending inventory is understated by $66,000 and Year 2 ending inventory is
overstated by $36,000
For Year Ended December 31
(a) Cost of goods sold
(b) Net income
(c) Total current assets
(d) Total equity
Required:
1. For each key financial statement figure-(a), (b), (c. and (d) above-prepare a table to show the adjustments necessary to correct the
reported amounts.
2. What is the total error in combined net income for the three-year period resulting from the inventory errors?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
For each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary to
correct the reported amounts. (Amounts to be deducted must be entered with a minus sign.)
Year 1 Year 2
Year 3
Cost of goods sold
Reported amount
Adjustment for 12/31/Year 1 m
Adjustment for 12/31/Year 2 error
Comected amount
Net income
Reported amount
Adjustment for 12/31/Year 1 error
Adjustment for 12/31/Year 2
Corrected amount
Total current asset
Reported amount
Adjustment for 12/31/Year 1
Adjustment for 12/31/ear 2 erron
Conected amount
Equity
Reported amount
$ 885,000
Year 1 Year 2 Year 3
$741,000 $971,000
284,090 291,000
1,263,000 1,376,000
1,403,000 1,596,eee
266,000
1,246,000
1,261,000
Adjustment for 12/01/Year 1 mor
Adjustment for 12/31/Mer 2 m
Corected amount
F1
F2
S
$
OS
s
OS
80
F3
0$
0
05
Benvied 2
000
000
F4
A
FS
< Prev
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