Navajo Companys 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 $59,000, and Year 2 ending inventory is overstated by $29,000.

For Year Ended December 31		Year 1		Year 2		Year 3
(a)	Cost of goods sold	$	734,000	$	964,000	$	799,000
(b)	Net income		277,000		284,000		259,000
(c)	Total current assets		1,256,000		1,369,000		1,239,000
(d)	Total equity		1,396,000		1,589,000		1,254,000

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. 2. What is the total error in combined net income for the three-year period resulting from the inventory errors?

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2

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.)

		Year 1	Year 2	Year 3
Cost of goods sold:
Reported amount
Adjustments for:	12/31/Year 1 error
	12/31/Year 2 error
Corrected amount
Net income:
Reported amount
Adjustments for:	12/31/Year 1 error
	12/31/Year 2 error
Corrected amount
Total current assets:
Reported amount
Adjustments for:	12/31/Year 1 error
	12/31/Year 2 error
Corrected amount
Equity:
Reported amount
Adjustments for:	12/31/Year 1 error
	12/31/Year 2 error
Corrected amount