Error Disclosure
Comparative statements for Bodie Corporation are as follows:
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Bodie Corporation |
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Income Statements and Statement of Retained Earnings |
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For the Years Ended December 31 |
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2007 |
2006 |
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Sales |
$4,600,000 |
$4,350,000 |
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Cost of goods sold |
2,346,000 |
2,305,500 |
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Gross profit |
$2,254,000 |
$2,044,500 |
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Expenses |
1,598,000 |
1,533,000 |
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Net income |
$ 656,000 |
$ 511,500 |
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Beginning retained earnings |
$1,441,000 |
$1,077,500 |
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Net income |
656,000 |
511,500 |
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Dividends |
(157,000) |
(148,000) |
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Ending retained earnings |
$1,940,000 |
$1,441,000 |
In 2007, Bodie Corporation discovers that ending inventory for 2006 was understated by $11,000. Prepare comparative income and retained earnings statements for 2006 and 2007. Ignore income tax effects, and assume that the 2007 books have not been closed.