Question 7 Inventories and Cost of Sales Problems

Navajo Company's year-end financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Year 1 ending inventory is understated by $69,000 and Year 2 ending inventory is overstated by $39,000. Required: 1. For each key financial statement figure-(a), (b),(c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts. 2. What is the total error in combined net income for the three-year period resulting from the inventory errors? Complete this question by entering your answers in the tabs below. For each key financial statement figure-(a), (b),(c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts. Note: Amounts to be deducted must be entered with a minus sign. Navajo Company's year-end financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Year 1 ending inventory is understated by $69,000 and Year 2 ending inventory is overstated by $39,000. Required: 1. For each key financial statement figure-(a), (b),(c), and (d) above-prepare a table to show the adjustments necessary to correct the reported amounts. 2. What is the total error in combined net income for the three-year period resulting from the inventory errors? Complete this question by entering your answers in the tabs below. What is the total error in combined net income for the three-year period resulting from the inventory errors