Navajo Company's 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 $$56,000$ and Year $2$ ending inventory is

overstated by $$20,000.$

Required:

For each key financial statement figure$-($a$),($b$),($c$),$ and $(d)$ above$-$prepare 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?

For each key financial statement figure$-($a$),($b$),($c$),$ and $($d$)$ above$-$prepare a table to show the adjustments necessary to

correct the reported amounts.

Note: Amounts to be deducted must be entered with a minus sign.

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

Error in total net income of three years