Partial income statements for Sherwood Company summarized for a four-year period show the following: 2014...
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Partial income statements for Sherwood Company summarized for a four-year period show the following: 2014 $2,350,000 1,280,000 2015 $2,750,000 Net Sales Cost of Goods Sold 2016 $2,850,000 1,650,000 2017 $3,350,000 1,980,000 1,540,000 Gross Profit 1,070,000 1,210,000 1,200,000 1,370,000 An audit revealed that in determining these amounts, the ending inventory for 2015 was overstated by $17,000. The inventory balance on December 31, 2016, was accurately stated. The company uses a periodic inventory system. Required: 1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error. Sherwood Company Income Statements (Corrected) 2014 2015 2016 2017 Net sales Cost of goods sold Gross profit $ 0 $ 0 $ 0 $ 0 2-a. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction. (Round your answers to the nearest whole percent.) 2014 2015 2016 2017 a. Before correction % % % b. After correction % % % % 2-b. Do the results lend confidence to your corrected amounts? No Yes
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