P7-9 Analyzing and Interpreting the Effects of Inventory Errors LO7-7 [The following information applies to...
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P7-9 Analyzing and Interpreting the Effects of Inventory Errors LO7-7 [The following information applies to the questions displayed below The income statement for Pruitt Company summarized for a four-year period shows the following 2016 2017 2018 2019 Sales revenue Cost of goods sold Gross profit Expenses Pretax income Income tax expense (40%) Net income $2,029,000 $ 2,450,000 $ 2,717,000 $2,977,000 2,110,000 867000 533,000 334,000 133,600 32,400 202,200 $202,200 $200,400 1,615,000 835,000 498,000 337000 134,800 1,772,000 1,504,000 525,000 471,000 54,000 21,600 945,000 522,000 423,000 169,200 An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $19,000. The company uses a periodic inventory system
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