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Partial income statements for Sherwood Company summarized for a four-year period show the following: Net Salon Cost of Goods Sold 2014 $2,000,000 1,400,000 2015 52,400,000

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Partial income statements for Sherwood Company summarized for a four-year period show the following: Net Salon Cost of Goods Sold 2014 $2,000,000 1,400,000 2015 52,400,000 1,660,000 2016 $2,500,000 1,770,000 2017 $3,000,000 2,100,000 Cross Profit 600,000 740,000 730,000 900,000 An audit revealed that in determining these amounts, the ending inventory for 2015 was overstated by $20,000. The inventory balance on December 31, 2016. was accurately stated. The company uses a periodic inventory system. Required: 1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error Sherwood Company Income Statements (Corrected) 2014 2015 2016 2017 Not sales Cost of goods sold Groos profit 2-a. Compute the gross profit percentage for each year (6) before the correction and (b) after the correction (Round your answers to the nearest whole percent.) 2014 2015 2016 2017 Before correction b. After correction % * 2.b. Do the results tend confidence to your corrected amounts? NO Yes

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