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Unformatted text preview: 3,000 Requirement 3 The financial statements that were incorrect as a result of both errors (effect of one error in 2004 and effect of three errors in 2005) would be retrospectively restated to report the correct inventory amounts, cost of goods sold, income, and retained earnings when those statements are reported again for comparative purposes in the 2006 annual report. A prior period adjustment to retained earnings would be reported, and a disclosure note should describe the nature of the error and the impact of its correction on each years net income, income before extraordinary items, and earnings per share....
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- Spring '09
- Financial Accounting