Errors

During the course of your examination of the financial statements of Burnett Co., a new client, for the year ended December 31, 2016, you discover the following:

Inventory at January 1, 2016 was understated by $6,000.

Inventory at December 31, 2016 was overstated by $5,000.

During 2016, the company received a $1,000 cash advance from a customer for merchandise to be manufactured and shipped during 2017. It had credited the $1,000 to sales revenue. The company's gross profit on sales is 50%. Net income reported on the 2016 income statement (before reflecting any adjustments for the above items) is $20,000.

Required:

What is the correct net income for 2016?

BURNETT CO.
Calculation of correct net income
For the year ended December 31, 2016
	$
Adjustments
	$