This exercise will enable you to practice identifying the effects of inventory errors on the financial statements.
The net income per books was determined without knowledge of the errors indicated.
|
Year |
Net Income |
Error in Ending Inventory |
|
|
2011 |
$100.000 |
Overstated |
$6.000 |
|
2012 |
104.000 |
Overstated |
14.000 |
|
2013 |
108,000 |
Understated |
22,000 |
|
2014 |
112.000 |
No error |
|
|
Total |
$424,000 |
||
Instructions
Compute the corrected net income figure for each of the four years for the Red Bliss Company after taking into account the inventory errors.
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