HW 6 # 7

The accounting records of Salem Home Store show these data (in millions): IZt (Click the icon to view the income statements.) The shareholders are very happy with Salem's steady increase in net income. However, auditors discovered that the ending irventory for 2019 was understated by $6 million and that the ending inventory for 2020 was understated by $4 million. The ending inventory at December 31,2021 , was correct. Read the reguirements. Requirement 1. Show corrected income statements for each of the three years. (Enter all amounts in millions as provided in the question.) Data table in the question Requirements 1. Show corrected income statements for each of the three years. 2. How much did these assumed corrections add to or take away from Salem's total net income over the three-year period? How did the corrections affect the trend of net income? 3. Will Salem's shareholders still be happy with the company's trend of net income? Explain. The accounting records of Salem Home Store show these data (in millions): IZt (Click the icon to view the income statements.) The shareholders are very happy with Salem's steady increase in net income. However, auditors discovered that the ending irventory for 2019 was understated by $6 million and that the ending inventory for 2020 was understated by $4 million. The ending inventory at December 31,2021 , was correct. Read the reguirements. Requirement 1. Show corrected income statements for each of the three years. (Enter all amounts in millions as provided in the question.) Data table in the question Requirements 1. Show corrected income statements for each of the three years. 2. How much did these assumed corrections add to or take away from Salem's total net income over the three-year period? How did the corrections affect the trend of net income? 3. Will Salem's shareholders still be happy with the company's trend of net income? Explain