Required: 1. Prepare the income statements to reflect the correct amounts, taking into consideration the inventory error.
Required: 1. Prepare the income statements to reflect the correct amounts, taking into consideration the inventory error.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The income statement for Pruitt Company summarized for a four-year period shows the following:
2016
$ 2,027,000
1,492,000
535,000
473,000
62,000
21,700
2017
$ 2,451,000
1,616,000
835,000
505,000
330,000
115,500
2018
$ 2,704,000
000 ,70ר.1
934,000
519,000
415,000
145,250
2019
$ 2,979,000
2,101,000
878,000
537,000
341,000
119,350
221,650
Sales revenue
Cost of goods sold
Gross profit
Expenses
Pretax income
Income tax expense (358)
Net income
40,300
214,500
269,750
An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $27,000. The
company uses a periodic inventory system.
Required:
1. Prepare the income statements to reflect the correct amounts, taking into consideration the inventory error.
PRUITT COMPANY
Income Statement
For the Four-Year Period
2016
2017
2018
2019
Sales revenue
Cost of goods sold
Gross profit
Expenses
Pretax income
Income tax expense (35%)
Net income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd2045620-61b4-47b5-9f1e-0b5d0dfdaac0%2F9e3279b5-098c-4d51-993f-43fc825cd1d5%2Fpsg6oj_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
The income statement for Pruitt Company summarized for a four-year period shows the following:
2016
$ 2,027,000
1,492,000
535,000
473,000
62,000
21,700
2017
$ 2,451,000
1,616,000
835,000
505,000
330,000
115,500
2018
$ 2,704,000
000 ,70ר.1
934,000
519,000
415,000
145,250
2019
$ 2,979,000
2,101,000
878,000
537,000
341,000
119,350
221,650
Sales revenue
Cost of goods sold
Gross profit
Expenses
Pretax income
Income tax expense (358)
Net income
40,300
214,500
269,750
An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $27,000. The
company uses a periodic inventory system.
Required:
1. Prepare the income statements to reflect the correct amounts, taking into consideration the inventory error.
PRUITT COMPANY
Income Statement
For the Four-Year Period
2016
2017
2018
2019
Sales revenue
Cost of goods sold
Gross profit
Expenses
Pretax income
Income tax expense (35%)
Net income
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