Navajo Companys financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Inventory on December 31, 2012, is understated by $62,000, and inventory on December 31, 2013, is overstated by $32,000.

For Year Ended December 31 2012 2013 2014 (a) Cost of goods sold $ 737,000 $ 967,000 $ 802,000 (b) Net income 280,000 287,000 262,000 (c) Total current assets 1,259,000 1,372,000 1,242,000 (d) Total equity 1,399,000 1,592,000 1,257,000

Required: 1. For each key financial statement figure(a), (b), (c), and (d) belowprepare a table to show the adjustments necessary to correct the reported amounts. (Amounts to be deducted must be entered with a minus sign.) 2. What is the error in total net income for the combined three-year period resulting from the inventory errors? ReferenceseBook & Resources WorksheetDifficulty: 3 HardLearning Objective: 05-A2 Analyze the effects of inventory errors on current and future financial statements.