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Navajo Company s year - end financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made

Navajo Companys year-end financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Year 1 ending inventory is understated by $65,000 and Year 2 ending inventory is overstated by $35,000.
For Year Ended December 31 Year 1 Year 2 Year 3
(a) Cost of goods sold $ 740,000 $ 970,000 $ 805,000
(b) Net income 283,000290,000265,000
(c) Total current assets 1,262,0001,375,0001,245,000
(d) Total equity 1,402,0001,595,0001,260,000
Required:
For each key financial statement figure(a),(b),(c), and (d) aboveprepare a table to show the adjustments necessary to correct the reported amounts.
What is the total error in combined net income for the three-year period resulting from the inventory errors?

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