Problem 6-10A Analysis of inventory errors LO5, 9

Shockley Company reported the following amounts in its financial statements:

Financial Statements for Year Ended December 31. 2023 2024 2025 (a)Cost of goods sold$715,000$847,000$ 770,000 (b)Profit 220,000 275,000 231,000 (c)Total current assets 1,155,000 1,265,000 1,100,000 (d)Equity 1,287,000 1,430,000 1,232,000

In making the physical counts of inventory, the following errors were made:

• Inventory on December 31, 2023: understated $70,000
• Inventory on December 31, 2024: overstated $32,000

Required: For each of the preceding financial statement items(a), (b), (c), and (d)prepare a schedule similar to the following and show the adjustments that would have been necessary to correct the reported amounts. (Negative answers should be indicated by a minus sign.)