Inventory 279 Requirements 1. State whether each year's net income before corrections is understated or overstated and indicate the amount of the understatement or overstatement. 2. Prepare corrected income statements for the three years. 3. What is the impact on the 2010 income statement if the 2008 inventory error is left uncorrected? P5-46A. Estimating ending inventory (Learning Objective 7) 15-20 min. 1. Was that neurred on May 31, 2. What amount should PC Wontaron 3. Journalize any required entries. PS-45A. Inventory errors (Learning Objective 6) 20-25 min. A & R Industrial Supply shows the following financial statement data for 2008, 2009, and 2010. Prior to issuing the 2010 statements, auditors found that the ending Inventory for 2008 was understated by $8,000 and that the ending inventory for 2010 was overstated by $9,000. The ending inventory at December 31, 2009, was correct. 2010 $210 2009 $191 2008 $186 (In thousands) Sales Revenue Cost of Goods Sold: Beginning Inventory Net Purchases Cost of Goods Available Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income $ 12 143 155 16 $ 18 121 139 12 $ 15 128 143 18 139 71 46 $ 25 127 64 43 $ 21 125 61 42 $ 19