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ACC 371 Chapter 9 Homework Handout

ACC 371 Chapter 9 Homework Handout - Chapter 9 Problem 1GP...

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Chapter 9 Problem 1GP King Company reported the following amounts of Net Income for the years indicated: 2007 $52,000 2008 38,000 2009 66,000 In 2010, the company discovered errors that had been made in computing ending inventorys for 2007 and 2008, as follows: 2007 Ending inventory was understated by $4,000 2008 Ending inventory was understated by $8,000 Instructions Calculate the correct amount of Net Income for 2007, 2008, and 2009. 2007 _____________ 2008 _____________ 2009 _____________
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Chapter 9 Problem 2GP On May 17, 2010, it was discovered that a material amount of inventory had been stolen. A physical count discloses that $55,000 (at cost) of merchandise was on hand as of May 17. The following additional data are available from the accounting records: Inventory, January 1 $ 62,000 Purchases, January 1 through May 17 114,000* Sales (goods delivered to customers through May 17) 90,000 *Includes $4,000 of goods shipped FOB shipping point on May 16 and received May 19 Records indicate that the company’s gross profit margin has averaged 40% of sales.
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