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What effect did the error have on the income tax expense for 2019 and 2020? The statements of earnings for Pruitt Company summarized for a
What effect did the error have on the income tax expense for 2019 and 2020? The statements of earnings for Pruitt Company summarized for a four-year period show the following famounts in thousands of dollars): 2018 $4.675 Sales revenge Cost of wales Gross profit Operating expenses Pretax warnings Income tax expense (401) Net earnings 2021 33,725 2.355 1.370 660 710 284 5 426 2020 $4,150 2.477 1,673 683 990 396 $ 594 2019 $4,400 2.632 1.768 700 1,060 424 5636 1712 712 1,000 400 $ 600 An audit revealed that in determining these amounts, the ending inventory for 2019 was understated by $56 Required: 1. Revise these statements of earnings to reflect the correct amounts. (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) Sales revenue Cost of sales Gross profit Operating expenses Pretax earnings Income tax expense Net earnings Answer is complete and correct. PRUITT COMPANY Corrected Statement of Earnings 2021 2020 2019 S 3,725 $ 4,150 4.400 $ 2,355 2,533 2,576 1,370 1.617 1.824 660 683 708 710 934 1.116 284 374 446 s 426 $ 560$ 670 S 2018 4,675 2,963 1.712 712 1.000 400 600 OOO 2. Did the error affect the cumulative net earnings for the four-year period? Not affected Affected 3. What effect did the error have on the income tax expense for 2019 and 2020? (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) Answer is not complete. Income tax expense Overstatement Understatement 2020 2019 Oo
What effect did the error have on the income tax expense for 2019 and 2020?
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