Smoots Company keeps its inventory records on a periodic basis. The following amounts were reported in the company's financial statements:

In making the physical counts of inventory, the following errors were made:

\section*{Required}
1. For each of the financial statement items listed above, prepare a schedule similar to the following and show the adjustments that would have been necessary to correct the reported amounts.

2. What is the error in the aggregate net income for the three-year period that resulted from the inventory errors?

Transcribed Image Text:

Cost of goods sold Net income. Total current assets. Owners' equity. Financial Statements for Year Ended December 31 1989 $ 48,000 1990 $ 56,000 1991 $50,000 15,000 21,000 12,000 90,000 96,000 82,000 102,000 110,000 100,000