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Navajo Company's year-end financial statements show the following. The company recently discovered that in making physical coun of inventory, it had made the following errors: Year 1 ending inventory is understated by $51,000 and Year 2 ending inventory is overstated by $21,000. For Year Ended December 31 (a) Cost of goods sold (b) Net income (c) Total current assets (d) Total equity Required 1 Required 2 Year 1 $ 726,000 269,000 1,248,000 1,388,000 Year 2 $ 956,000 276,000 1,361,000 1,581,000 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. Cost of goods sold: Reported amount error Adjustment for 12/31/Year 1 Adjustment for 12/31/Year 2 error Corrected amount Net income Reported amount Year 3. $ 791,000 251,000. 1,231,000 1,246,000 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

Navajo Company's year-end financial statements show the following. The company recently discovered that in making physical coun of inventory, it had made the following errors: Year 1 ending inventory is understated by $51,000 and Year 2 ending inventory is overstated by $21,000. For Year Ended December 31 (a) Cost of goods sold (b) Net income (c) Total current assets (d) Total equity Required 1 Required 2 Year 1 $ 726,000 269,000 1,248,000 1,388,000 Year 2 $ 956,000 276,000 1,361,000 1,581,000 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. Cost of goods sold: Reported amount error Adjustment for 12/31/Year 1 Adjustment for 12/31/Year 2 error Corrected amount Net income Reported amount Year 3. $ 791,000 251,000. 1,231,000 1,246,000 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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 $51,000 and Year 2 ending inventory is overstated by $21,000. For Year Ended December 31 (a) Cost of goods sold (b) Net income (c) Total current assets (d) Total equity Year 1 $ 726,000 269,000 1,248,000 1,388,000 Cost of goods sold: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Net income: 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. Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Year 2 $ 956,000 276,000 1,361,000 1,581,000 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 be entered with a minus sign.) Year 2 Year 3 Year 3. $ 791,000 251,000. 1,231,000 1,246,000 Year 1,
Transcribed Image Text: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 $51,000 and Year 2 ending inventory is overstated by $21,000. For Year Ended December 31 (a) Cost of goods sold (b) Net income (c) Total current assets (d) Total equity Year 1 $ 726,000 269,000 1,248,000 1,388,000 Cost of goods sold: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Net income: 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. Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Year 2 $ 956,000 276,000 1,361,000 1,581,000 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 be entered with a minus sign.) Year 2 Year 3 Year 3. $ 791,000 251,000. 1,231,000 1,246,000 Year 1,
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.) Cost of goods sold: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Net income: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Total current assets: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Equity: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Show Transcribed Text For Year Ended December 31 (a) Cost of goods sold (b) Net income (c) Total current assets (d) Total equity Year 1 3 Required 1 Required t Required 2 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 $51,000 and Year 2 ending inventory is overstated by $21,000. Year 2 Year Year 2 Year $726,000 $956,000 $791,000 269,000 1771 276,000 113 251,000 1,248,000 1,361,000 1,231,000 1,388,000 1,581,000 1,246,000 Complete this question by entering your answers in the tabs below. 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? Year 3 Required 1 Required 2 > What is the total error in combined net income for the three-year period resulting from the inventory errors? Error in total net income of three years
Transcribed Image Text: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.) Cost of goods sold: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Net income: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Total current assets: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Equity: Reported amount Adjustment for 12/31/Year 1 error Adjustment for 12/31/Year 2 error Corrected amount Show Transcribed Text For Year Ended December 31 (a) Cost of goods sold (b) Net income (c) Total current assets (d) Total equity Year 1 3 Required 1 Required t Required 2 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 $51,000 and Year 2 ending inventory is overstated by $21,000. Year 2 Year Year 2 Year $726,000 $956,000 $791,000 269,000 1771 276,000 113 251,000 1,248,000 1,361,000 1,231,000 1,388,000 1,581,000 1,246,000 Complete this question by entering your answers in the tabs below. 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? Year 3 Required 1 Required 2 > What is the total error in combined net income for the three-year period resulting from the inventory errors? Error in total net income of three years
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