Navajo Company's yearend financial statements show the following. The company recently discovered that in making physical counts
of inventory, it had made the following errors: Year ending inventory is understated by $ and Year ending inventory is
overstated by $
Required:
For each key financial statement figureabc and aboveprepare a table to show the adjustments necessary to correct
the reported amounts.
What is the total error in combined net income for the threeyear period resulting from the inventory errors?
For each key financial statement figureabc and d aboveprepare a table to show the adjustments necessary to
correct the reported amounts.
Note: Amounts to be deducted must be entered with a minus sign.
What is the total error in combined net income for the threeyear period resulting from the inventory errors?
Error in total net income of three years
