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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 yearend financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Year ending inventory is understated by $ and Year ending inventory is overstated by $
For Year Ended December Year Year Year
a Cost of goods sold $ $ $
b Net income
c Total current assets
d Total equity
Required:
For each key financial statement figureabc 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 threeyear period resulting from the inventory errors?
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