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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:

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 $54,000 and Year 2 ending inventory is overstated by $24,000.

For Year Ended December 31 Year 1 Year 2 Year 3
(a) Cost of goods sold $ 729,000 $ 959,000 $ 794,000
(b) Net income 272,000 279,000 254,000
(c) Total current assets 1,251,000 1,364,000 1,234,000
(d) Total equity 1,391,000 1,584,000 1,249,000

Required:

  1. For each key financial statement figure(a), (b), (c), and (d) aboveprepare 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?
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Complete this question by entering your answers in the tabs below. 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. Complete this question by entering your answers in the tabs below. What is the total error in combined net income for the three-year period resulting from the inventory errors

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