CK P06 - Student Name Cassidy Kottke Class Morning Problem...

Info icon This preview shows pages 1–2. Sign up to view the full content.

Student Name: Cassidy Kottke Class: Morning Problem 06-06A NAVAJO COMPANY Adjustments to Correct Inventory Errors (a) Cost of goods sold: 2012 2013 2014 Reported $ 615,000 $ 957,000 $ 780,000 Adjustments: 12/31/2012 error (56,000) 56,000 12/31/2013 error 20,000 (20,000) Corrected $ 559,000 $ 1,033,000 $ 760,000 Correct! Correct! Correct! (b) Net income: 2012 2013 2014 Reported $ 230,000 $ 285,000 $ 241,000 Adjustments: 12/31/2012 error 56,000 (56,000) 12/31/2013 error (20,000) 20,000 Corrected $ 286,000 $ 209,000 $ 261,000 Correct! Correct! Correct! (c) Total current assets: 2012 2013 2014 Reported $ 1,255,000 $ 1,365,000 $ 1,200,000 Adjustments: 12/31/2012 error 56,000 12/31/2013 error (20,000) Corrected $ 1,311,000 $ 1,345,000 $ 1,200,000 Correct! Correct! Correct! (d) Equity: 2012 2013 2014 Reported $ 1,387,000 $ 1,530,000 $ 1,242,000 Adjustments: 12/31/2012 error 56,000 12/31/2013 error (20,000) Corrected $ 1,443,000 $ 1,510,000 $ 1,242,000 Correct! Correct! Correct! 2. What is the error in total net income for the combined three-year period resulting from the inventory errors? Explain At the end of 2012, the net income was understated due to the understatement in inventory, which also results in the overstatement at the beginning of the year 2013. Then, with the overstatement in inventory at the end
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
This is the end of the preview. Sign up to access the rest of the document.
  • Spring '16
  • Ellen Kemnetz
  • Managerial Accounting, Net Income, $ 56,000 20,000, Cassidy Kottke, $3,150,000 840,000

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern