Requirement 2. State whether each year's net income-before your correctionsis understated or overstated, and indicate the amount of Prior to correction net income was Year: 2019 2018 2017 Requirement 3. Compute the correct Select the labels and enter th overstated by understated by ind days' sales in inventory using the corrected income statement for the three years. (Ro e inventory turnover for each year. (Round your answers to two decimal places, X.XX.) = Inventory turnover Harmony Carpets's books show the following data. Click the icon to view the income statements.) In early 2020, auditors found that the ending merchandise inventory for 2017 was understated by $6,000 and that the ending merchandise inventory for 2019 was overstated by $7,000. The ending merchandise inventory at December 31, 2018, was correct. Read the requirements. Income Statement For the Years Ended December 31, 2019, 2018, and 2017 2019 2018 Ending Merchandise Inventory Overstated by $7,000 Correct 2017 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 * Data Table 2018 2019 $ 218,000 2017 $ $ 162,000 169,000 Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory $ $ $ 21,000 133,000 26,000 101,000 45,000 88,000 Net Cost of Purchases Cost of Goods Available for Sale 154,000 29,000 127,000 21,000 133,000 26,000 Less: Ending Merchandise Inventory Cost of Goods Sold Gross Profit 125,000 106,000 107,000 93,000 69,000 56,000 30,000 62,000 25,000 Operating Expenses $ 24,000 26,000 $ 37,000 Net Income Print Done 0 Requirements 1. Prepare corrected income statements for the three years. State whether each year's net income before your corrections is understated or overstated, and indicate the amount of the understatement or overstatement. Compute the inventory turnover and days' sales in inventory using the corrected income statement for the three years. (Round all numbers to two decimals.) 3. Print Print Done 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 2019 2018 2017 Requirement 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.) Select the labels and enter the amounts to compute inventory turnover for each year. (Round your answers to two decimal places, X.XX.) Inventory turnover times 2019 2018 times times 2017 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.) = Days' sales in inventory days 2019 2018 2017 days days Requirement 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.) Select the labels and enter the amounts to compute inventory turnover for each year. (Round your answers to two decimal places, X.XX.) = Inventory turnover times 2019 times times pute days' sales in inventory for each year. (Enter all amounts to two decimal places, X.XX.) 2018 365 days Average Merchandise Inventory 2017 Beginning Merchandise Inventory Now selec Cost of goods available for sale Cost of Goods Sold Ending Merchandise Inventory 2019 L Gross profit 2018 Net income 2017 L Operating expenses Purchases = Days' sales in inventory days days days befalitate bis bei fildaad bestilte tbasertation
