Branson Electric prepared the following condensed income statements for two successive years. At the end of 2020 (right-
Posted: Mon Apr 25, 2022 7:29 am
Branson Electric prepared the following condensed income
statements for two successive years.
At the end of 2020 (right-hand column), the inventory was
understated by $23,000, but the error was not discovered until
after the accounts had been closed and financial statements
prepared at the end of 2021. The balance sheets for the two years
showed owner’s equity of $390,000 at the end of 2020 and $490,000
at the end of 2021. (Branson is organized as a sole proprietorship
and does not incur income taxes expense.)
a. Compute the corrected net income
figures for 2020 and 2021.
b. Compute the gross profit amounts and
the gross profit percentages for each year on the basis of
corrected data. (Round "Gross profit percentage" to 2
decimal places (i.e. .1234 should be entered as
12.34))
statements for two successive years.
At the end of 2020 (right-hand column), the inventory was
understated by $23,000, but the error was not discovered until
after the accounts had been closed and financial statements
prepared at the end of 2021. The balance sheets for the two years
showed owner’s equity of $390,000 at the end of 2020 and $490,000
at the end of 2021. (Branson is organized as a sole proprietorship
and does not incur income taxes expense.)
a. Compute the corrected net income
figures for 2020 and 2021.
b. Compute the gross profit amounts and
the gross profit percentages for each year on the basis of
corrected data. (Round "Gross profit percentage" to 2
decimal places (i.e. .1234 should be entered as
12.34))