Prepare FULLY$-$RESTATED income statement and balance sheet in pages $5$ and $7,$ after

adjusting for the SALES UNDERSTATEMENT based on the information provided below.

Assume that tax rate is $15\%.$ Do NOT just cross out and replace numbers. Each team will

need to include FULLY$-$RESTATED income statement and balance sheet in the final project

presentation slides.

Show "Amount before adjustment", "Amount after adjustment" and "Explanation about

how adjustment is made" in the tables $($i$.$e$.,$ Income Statement Adjustment Table & Balance

Sheet Adjustment Table$)$ in pages $6$ and $8$ for each adjusted account. One simple example is

provided but other adjustments should need more detailed explanation. Show all your work

in the tables in pages $6$ and $8$ very cleanly.

Adjustments for the Sales understatement means that Sales will be HIGHER after the

adjustments. Since Sales will be HIGHER after the adjustments for the Sales

understatement, $($the directions of$)$ all adjustments will be exactly the OPPOSITE to Class $4$

Classwork and Real World Example, which are available in the Canvas.

Revenue after adjustments will be $17,428,716,$ which is an increase from $17,428,516$

before adjustments.

Assume that only "credit" Sales are understated before adjustments.

Cost of goods sold also needs to be adjusted in proportion to the ratio between Cost of

goods sold and Sales before adjustments, like the way we did for Class $4$ Classwork and

Real World Example.

Then, adjust all accounts that are affected by adjustments of Sales and Cost of goods sold.

Pay special attention to changes in DTA $($Deferred tax assets$)$ and DTL $($Deferred tax

liabilities$)$ after adjustments. Note also that only one of "Deferred tax assets, net" and

"Deferred tax liabilities, net" is reported under Long$-$term assets or Long$-$term liabilities.

If there is no relevant "Deferred tax assets, net" or "Deferred tax liabilities, net", one must

be created for the restated balance sheet, like the way we did for the LIFO to FIFO

conversion using the comprehensive problem.

Do NOT adjust Allowance for uncollectible $($or doubtful$)$ accounts and Bad debt expense,

like the way we did for Class $4$ Classwork and Real World Example.

If a relevant account does not exist for the adjustment, please create one or adjust "other"

account if "other" account exists, like the way we did for Real World Example.

Note that some account names appear a little different from the account names that we use

in our class discussions. For example, "Cost of sales" instead of "Cost of goods sold",

"Merchandise inventory" instead of "Inventory", and "Deferred income taxes" or

"Deferred taxes" on balance sheet instead of "Deferred tax liabilities, net" or "Deferred Original Balance Sheet

LAM RESEARCH CORPORATION

CONSOLIDATED BALANCE SHEETS

$($in thousands, except per share data$)$ Original Income Statement

LAM RESEARCH CORPORATION

CONSOLIDATED STATEMENIS OF OPERATIONS

$($in thousands, except per share data$)$

tax assets, net". This is because companies have freedom in naming accounts. Please use

relevant accounts for the adjustments.