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Partial income statements for Murphy & Murphy ( M & M ) reported the following summarized amounts: After these amounts were reported, M & M
Partial income statements for Murphy & Murphy M & M reported the following summarized amounts:
After these amounts were reported, M & Ms accountant determined the inventory at the end of Quarter was understated by $
The inventory balance at the end of the other three quarters was accurately stated.
Required:
Restate the partial income statements to reflect the correct amounts, after fixing the inventory error.
Compute the gross profit percentage for all four quarters both a before the correction and b after the correction. Does the pattern
of gross profit percentages lend confidence to your corrected amounts? TIP: Gross profit percentage is calculated as Gross Profit
Net Sales
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Restate the partial income statements to reflect the correct amounts, after fixing the inventory error.
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