The financial effects of inventory errors
The following information was taken from the records of Eli Lilly, a major pharmaceutical (dollars in millions).
|
2008 |
2007 |
2006 |
|
|
Sales |
$20,378 |
$18,634 |
$15,691 |
|
Cost of goods sold |
4,383 |
4,249 |
3,547 |
|
Gross profit |
$15,995 |
$14,385 |
$12,144 |
|
Expenses |
18,067 |
11,432 |
9,481 |
|
Net income (loss) |
$2,072 |
$2,953 |
$2,663 |
Assume that ending inventory was overstated by $500 in 2006, understated by $150 in 2007, and overstated by $320 in 2008.
REQUIRED:
Compute the corrected cost of goods sold and net income for 2006, 2007, and 2008.