Navajo Company's year-end financial statements show the following. The company recently discovered that in making physical countsof inventory, it had made the following errors: Year 1 ending inventory is understated by $66,000 and Year 2 ending inventory isoverstated by $36,000.McrawWillFor Year Ended December 31(a) Cost of goods sold(b) Net income(c) Total current assets(d) Total equityRequired:1. For each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary to correct thereported amounts.2. What is the total error in combined net income for the three-year period resulting from the inventory errors?Required 1 Required 2.Complete this question by entering your answers in the tabs below.Cost of goods sold:Reported amountAdjustment for 12/31/Year 1 errorAdjustment for 12/31/Year 2 errorCorrected amountYear 1$ 741,000Year 2$ 971,000291,0001,376,000284,0001,263,0001,403,000 1,596,000For each key financial statement figure-(a), (b), (c), and (d) above-prepare a table to show the adjustments necessary tocorrect the reported amounts. (Amounts to be deducted must be entered with a minus sign.)Year 1Net income:Reported amountAdjustment for 12/31/Year 1 errorAdjustment for 12/31/Year 2 errorCorrected amountTotal current assets:Reported amountAdjustment for 12/31/Year 1 errorAdjustment for 12/31/Year 2 errorCorrected amount.Equity:Reported amountAdjustment for 12/31/Year 1 errorAdjustment for 12/31/Year 2 errorCorrected amountF1F2$$$$0 $0$0 $Required 1BeauYear 3$806,000266,0001,246,0001,261,0000 $Year 280F30 $0 $0 $0 $Year 3Required 2000000F40000MAR4F5< Prev14 of 8F6Next >F7t

The ending inventory is calculated as : Beginning inventory + Purchases - COGS

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 Year 1 $741,000 284,000 Year 2 $ 971,000 291,000 1,376,000 1,263,000 1,403,000 1,596,000 Year 3 $ 806,000 266,000 1,246,000 1,261,000 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?

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 Year 1 $741,000 284,000 Year 2 $ 971,000 291,000 1,376,000 1,263,000 1,403,000 1,596,000 Year 3 $ 806,000 266,000 1,246,000 1,261,000 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?

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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