Question

Chapter 05 Homework Saved Navajo Company's financial statements show the following. The company recently discovered that in making physical counts of inventory, it had made the following errors: Inventory on December 31, 2017, is understated by $58,000, and inventory on December 31, 2018, is overstated by $28,000. points For Year Ended December 31 (a) Cost of goods sold (b) Net income (C) Total current assets (d) Total equity 2017 $ 733,000 276,000 1,255,000 1,395,000 2018 $ 963,000 283,000 1,368,000 1,588,000 2019 $ 798,000 258,000 1,238,000 1,253,000 eBook Print Required: 1. For each key financial statement figure-(a), (b), (c), and (d) below-complete the table to show the adjustments necessary to correct the reported amounts. 2. What is the error in total net income for the combined three-year period resulting from the inventory errors? References Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each key financial statement figure-(a), (b), (c), and (d) below-complete the table to show the adjustments necessary to correct the reported amounts. (Amounts to be deducted must be entered with a minus sign.) 2017 2018 2019 Cost of goods sold: Reported amount Adjustments for: 12/31/2017 error 12/31/2018 error Corrected amount Net income: Reported amount Adjustments for: 12/31/2017 error 12/31/2018 error Corrected amount Total current assets: Reported amount Adjustments for: 12/31/2017 error 12/31/2018 error Corrected amount Equity Reported amount Adjustments for: 12/31/2017 error 12/31/2018 error Corrected amount Required 1 Required 2 >

Answer 1

(in $) 2018 Particulars 2017 2019 7,33,000 9,63,000 7,98,000 Cost of goods sold Reported amount Adjustments for- 12/31/2017 error 12/31/2018 error Corrected amount -58,000 58,000 28,000 10,49,000 -28,000 7,70,000 6,75,000 2,58,000 Net income Reported amount Adjustments for- 12/31/2017 error 12/31/2018 error Corrected amount 2,76,000 58,000 2,83,000 -58,000 -28,000 1,97,000 28,000 2,86,000 3,34,000 12,55,000 13,68,000 12,38,000 Total current assets Reported amount Adjustments for- 12/31/2017 error 12/31/2018 error Corrected amount 58,000 -28,000 13,40,000 13,13,000 12,38,000

13,95,000 15,88,000 12,53,000 Equity Reported amount Adjustments for- 12/31/2017 error 12/31/2018 error Corrected amount -58,000 28,000 16,16,000 13,37,000 12,53,000 Error in total net income for the combined three-year period resulting from the inventory errors is 0. LETTE