- Navajo Company S Year End Financial Statements Show The Following The Company Recently Discovered That In Making Physic 1 (19.21 KiB) Viewed 11 times
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 is understated by $67,000 and Year 2 ending inventory is overstated by $37,000. For Year Ended December 31 (a) Cost of goods sold (b) Net Income Year 1 $742,000 285,000 Year 2 $972,000 292,000 Year 3 $807,000 267,000 1,264,000 1,377,000 1,247,000 (e) Total current assets (d) Total equity 1.404,000 1,597,000 1,262,000 Required: 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?