Net Sales Revenue Cost of Goods Sold: Healthy Bite Grocery Income Statements Years Ended September 30, 2025 and 2024 2025 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 $ 11,000 75,000 86,000 19,500 $ 137,000 66,500 70,500 32,000 $ 38,500 2024 $ 12,000 74,000 86,000 11,000 $ 122,000 $ 75,000 47,000 26,000 21,000
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
![### Requirement 1: Prepare Corrected Income Statements for the Two Years
#### Healthy Bite Grocery Income Statements
#### Years Ended September 30, 2025 and 2024
Healthy Bite Grocery has provided comparative income statements for the fiscal years ending on September 30, 2025, and 2024. The grocery store discovered an overstatement in their 2024 ending merchandise inventory by $4,800, necessitating corrected income statements for both years.
**Income Statement Breakdown:**
**Sales Revenue:**
- 2025: [Data required]
- 2024: [Data required]
**Cost of Goods Sold:**
1. **Beginning Merchandise Inventory:**
- 2025: [Data required]
- 2024: [Data required]
2. **Net Cost of Purchases:**
- 2025: [Data required]
- 2024: [Data required]
3. **Cost of Goods Available for Sale:**
- 2025: [Data required]
- 2024: [Data required]
4. **Less: Ending Merchandise Inventory:**
- 2025: [Data required]
- 2024: [Data required]
5. **Cost of Goods Sold:**
- 2025: [Data required]
- 2024: [Data required]
**Gross Profit:**
- 2025: [Data required]
- 2024: [Data required]
**Operating Expenses:**
- 2025: [Data required]
- 2024: [Data required]
**Net Income:**
- 2025: [Data required]
- 2024: [Data required]
The template above highlights the necessary fields to complete the income statement corrections. Each section must be updated to reflect accurate data, post-adjustment for the previously overstated inventory.
Understanding these corrections is key to ensuring financial accuracy and transparency in reporting periods, and is reflective of best accounting practices.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F18c57004-9263-4143-859c-9972d940feeb%2Fba46ccb3-4363-453a-83ff-6c4b1930cbd5%2Foqbtt1m_processed.png&w=3840&q=75)
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