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.