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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:
- For each key financial statement figure(a), (b), (c), 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 three-year period resulting from the inventory errors?
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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