You have been assigned to examine the financial statements of Jackson, Inc. for the year ended December 31, 2018. You discover the following situations in February 2019:

2. The physical inventory count has been incorrectly counted resulting in the following errors.

December 2016 Overstated $20,000

December 2017 No error $0

December 2018 Overstated $ 6,000

11. Reported Net Income is:

2016 $560,000

2017 $580,000

2018 $620,000

Instructions:

(a) Assume the trial balance has been prepared but the books HAVE NOT been closed for 2018. Assuming all amounts are material, prepare journal entries showing the adjustments that are required. (Ignore income tax considerations).

(b) Assume the trial balance has been prepared but the books HAVE been closed for 2018. Assuming all amounts are material, prepare journal entries showing the adjustments that are required. (Ignore income tax considerations).

(c) Prepare a schedule correcting net incomes for 2016, 2017 and 2018 assuming the books HAVE NOT been closed for 2018.