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 isunderstated by $61,000 and Year 2 ending inventory is overstated by $31,000.For Year Ended December 31 Year 1Year 2Year 3$ 736,000$ 966,000$801,000(a) Cost of goods sold(b) Net income(c) Total current assets286,000 261,0001,241,0001,258,000 1,371,000(d) Total equity1,398,000 1,591,000 1,256,000279,000Required: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?

Financial statements are standardized reports that give an in-depth analysis of an organization's…

Navajo Company's year-end financial statements show the following. The company recently discovered that in making phy understated by $61,000 and Year 2 ending inventory is overstated by $31,000. For Year Ended December 31 Year 1 Year 2 Year 3 (a) Cost of goods sold $ 736,000 $966,000 $801,000 (b) Net income 279,000 286,000 261,000 (c) Total current assets 1,258,000 1,371,000 1,241,000

Navajo Company's year-end financial statements show the following. The company recently discovered that in making phy understated by $61,000 and Year 2 ending inventory is overstated by $31,000. For Year Ended December 31 Year 1 Year 2 Year 3 (a) Cost of goods sold $ 736,000 $966,000 $801,000 (b) Net income 279,000 286,000 261,000 (c) Total current assets 1,258,000 1,371,000 1,241,000

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 67P

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