Q1.

Q2. The Computational Error Company reported net income of $240,000 and $270,000 for 2006 and 2007. It was discovered later that the ending inventory for 2006 was understated by $28,000. The net income for 2006 was __________, and the net income for 2007 was __________.

Use the following information and the retail inventory method to estimate the ending inventory at cost: Retail Cost $44,000 $70,000 Beginning inventory Purchases, net 550,000 920,000 Sales 900,000