Pond Rush Carpets's books show the following data: (Click the icon to view the income statements.) In early 2018, auditors found that the ending merchandise inventory for 2015 was understated by $6,000 and that the ending merchandise inventory for 2017 was overstated by $7,000. The ending merchandise inventory at December 31, 2016, was correct Read the requirements. Requirement 1. Prepare corrected income statements for the three years. Pond Rush Carpets Income Statement For the Years Ended December 31, 2017, 2016, and 2015 , , 2017 2016 Ending Merchandise Inventory Overstated by $7,000 Correct 2015 Ending Merchandise Inventory Understated by $6,000 Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory Net Cost of Purchases Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income Requirement 2. State whether each year's net income-before your corrections is understated or overstated, and indicate the amount of the understatement or overstatement. . Year: Prior to correction net income was 2017 2016 2015 Requirement 3. Compute the inventory tumover and days' sales in inventory using the corrected income statement for the three years. (Round all numbers to two decimals.) Select the labels and enter the amounts to compute inventory turnover for each year. (Round your answers to two decimal places, X.XX.) 2017 Inventory turnover times times 2016 1 2015 times Now Select the labels and enter the amounts to compute days' sales in inventory for each year. (Enter all amounts to two decimal places, X.XX.) 1 Days' sales in Inventory 2017 1 days 2016 1 days 2015 1 days Data Table 2017 2016 2015 Net Sales Revenue $ 215,000 $ 165,000 $ 180,000 Cost of Goods Sold: Beginning Merchandise Inventory $ $ 26,000 134,000 $ 32,000 108,000 50,000 94,000 Net Cost of Purchases Cost of Goods Available for Sale 160,000 35,000 140,000 26,000 144,000 32,000 Less: Ending Merchandise Inventory Cost of Goods Sold 125,000 114,000 112,000 Gross Profit 90,000 61,000 51,000 24,000 68,000 28,000 Operating Expenses $ 29,000 $ 27,000 $ 40,000 Net Income Print Done i Requirements 1. Prepare corrected income statements for the three years. 2. State whether each year's net income-before your correctionsis understated or overstated, and indicate the amount of the understatement or overstatement 3. Compute the inventory turnover and days' sales in inventory using the corrected income statement for the three years. (Round all numbers to two decimals.) Print Done Pond Rush Carpets's books show the following data: (Click the icon to view the income statements.) In early 2018, auditors found that the ending merchandise inventory for 2015 was understated by $6,000 and that the ending merchandise inventory for 2017 was overstated by $7,000. The ending merchandise inventory at December 31, 2016, was correct Read the requirements. Requirement 1. Prepare corrected income statements for the three years. Pond Rush Carpets Income Statement For the Years Ended December 31, 2017, 2016, and 2015 , , 2017 2016 Ending Merchandise Inventory Overstated by $7,000 Correct 2015 Ending Merchandise Inventory Understated by $6,000 Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory Net Cost of Purchases Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods Sold Gross Profit Operating Expenses Net Income Requirement 2. State whether each year's net income-before your corrections is understated or overstated, and indicate the amount of the understatement or overstatement. . Year: Prior to correction net income was 2017 2016 2015 Requirement 3. Compute the inventory tumover and days' sales in inventory using the corrected income statement for the three years. (Round all numbers to two decimals.) Select the labels and enter the amounts to compute inventory turnover for each year. (Round your answers to two decimal places, X.XX.) 2017 Inventory turnover times times 2016 1 2015 times Now Select the labels and enter the amounts to compute days' sales in inventory for each year. (Enter all amounts to two decimal places, X.XX.) 1 Days' sales in Inventory 2017 1 days 2016 1 days 2015 1 days Data Table 2017 2016 2015 Net Sales Revenue $ 215,000 $ 165,000 $ 180,000 Cost of Goods Sold: Beginning Merchandise Inventory $ $ 26,000 134,000 $ 32,000 108,000 50,000 94,000 Net Cost of Purchases Cost of Goods Available for Sale 160,000 35,000 140,000 26,000 144,000 32,000 Less: Ending Merchandise Inventory Cost of Goods Sold 125,000 114,000 112,000 Gross Profit 90,000 61,000 51,000 24,000 68,000 28,000 Operating Expenses $ 29,000 $ 27,000 $ 40,000 Net Income Print Done i Requirements 1. Prepare corrected income statements for the three years. 2. State whether each year's net income-before your correctionsis understated or overstated, and indicate the amount of the understatement or overstatement 3. Compute the inventory turnover and days' sales in inventory using the corrected income statement for the three years. (Round all numbers to two decimals.) Print Done
