Waterlily Carpets' books show the following data. (Click the icon to view the income statements.)...
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Waterlily Carpets' books show the following data. (Click the icon to view the income statements.) In early 2026 , auditors found that the ending merchandise inventory for 2023 was understated by $4,000 and that the ending merchandise inventory for 2025 was overstated by $5,000. The ending merchandise inventory at December 31, 2024, was correct. Read the requirements. Requirement 2. State whether each year's net income-before your corrections-is understated or overstated, and indicate the amount of the understatement or overstatement. Requirement 3. Compute the inventory turnover and days' sales in inventory using the corrected income statement for the three years. (Round all numbers to two decimals.) Select the labels and enter the amounts to compute inventory turnover for each year. (Round your answers to two decimal places, X.XX.) Now select the labels and enter the amounts to compute days' sales in inventory for each year. (Enter all amounts to two decimal places, X.XX.) \begin{tabular}{l|lll} & & & Days' sales in inventory \\ 2025 & & = & days \\ 2024 & & = & days \\ 2023 & & = & days \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline & \multicolumn{2}{|c|}{2025} & \multicolumn{3}{|c|}{2024} & \multicolumn{3}{|c|}{2023} \\ \hline Net Sales Revenue & & 205,000 & & $ & 161,000 & & $ & 174,000 \\ \hline \multicolumn{9}{|l|}{ Cost of Goods Sold: } \\ \hline Beginning Merchandise Inventory & $23,000 & & $ & 26,000 & & $ & 36,000 & \\ \hline Plus: Net Cost of Inventory Purchased & 130,000 & & & 91,000 & & & 80,000 & \\ \hline Cost of Goods Available for Sale & 153,000 & & & 117,000 & & & 116,000 & \\ \hline Less: Ending Merchandise Inventory & 33,000 & & & 23,000 & & & 26,000 & \\ \hline Cost of Goods Sold & & 120,000 & & & 94,000 & & & 90,000 \\ \hline Gross Profit & & 85,000 & & & 67,000 & & & 84,000 \\ \hline Operating Expenses & & 58,000 & & & 38,000 & & & 50,000 \\ \hline Net Income & & 27,000 & & $ & 29,000 & & $ & 34,000 \\ \hline \end{tabular}
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Waterlily Carpets' books show the following data. (Click the icon to view the income statements.) In early 2026 , auditors found that the ending merchandise inventory for 2023 was understated by $4,000 and that the ending merchandise inventory for 2025 was overstated by $5,000. The ending merchandise inventory at December 31, 2024, was correct. Read the requirements. Requirement 2. State whether each year's net income-before your corrections-is understated or overstated, and indicate the amount of the understatement or overstatement. Requirement 3. Compute the inventory turnover and days' sales in inventory using the corrected income statement for the three years. (Round all numbers to two decimals.) Select the labels and enter the amounts to compute inventory turnover for each year. (Round your answers to two decimal places, X.XX.) Now select the labels and enter the amounts to compute days' sales in inventory for each year. (Enter all amounts to two decimal places, X.XX.) \begin{tabular}{l|lll} & & & Days' sales in inventory \\ 2025 & & = & days \\ 2024 & & = & days \\ 2023 & & = & days \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline & \multicolumn{2}{|c|}{2025} & \multicolumn{3}{|c|}{2024} & \multicolumn{3}{|c|}{2023} \\ \hline Net Sales Revenue & & 205,000 & & $ & 161,000 & & $ & 174,000 \\ \hline \multicolumn{9}{|l|}{ Cost of Goods Sold: } \\ \hline Beginning Merchandise Inventory & $23,000 & & $ & 26,000 & & $ & 36,000 & \\ \hline Plus: Net Cost of Inventory Purchased & 130,000 & & & 91,000 & & & 80,000 & \\ \hline Cost of Goods Available for Sale & 153,000 & & & 117,000 & & & 116,000 & \\ \hline Less: Ending Merchandise Inventory & 33,000 & & & 23,000 & & & 26,000 & \\ \hline Cost of Goods Sold & & 120,000 & & & 94,000 & & & 90,000 \\ \hline Gross Profit & & 85,000 & & & 67,000 & & & 84,000 \\ \hline Operating Expenses & & 58,000 & & & 38,000 & & & 50,000 \\ \hline Net Income & & 27,000 & & $ & 29,000 & & $ & 34,000 \\ \hline \end{tabular} 