Exhibits 1 and 4 present DHB€™s original 2003€“2004 balance sheets and income statements and the restated balance sheets and income statements for those two years, respectively. Review the original and restated financial statements for 2004 and identify the €œmaterial€ differences between them. (You are not required to identify the sources of these differences.) Defend your choices.
Exhibits: 1

Exhibits: 4

Exhibits: 4
Continued

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DHB Industries, Inc. Income Statements 2003-2004 (000s omitted) Years Ended December 31 2004 Net sales Cost of goods sold Gross profit Selling, general and administrative expenses 2003 $230,011 166,670 63,341 37,325 26,016 S340,075 245,940 94,135 44,564 49,571 Income before other income (expense) Other income (1,344) (904) 1,450 1,059 261 26,277 11,098 15,179 Interest expense Write-down of other investment Gain on sale of subsidiary stock Miscellaneous income (1,374) 35 Total other income 1,339) Income before income tax Income tax expense Income before minority interest of subsidiary Less minority interest of subsidiary 48,232 17,573 30,659 (224) 30,435 (360) Net income available to common stockholders 30,075 0.73 $ 0.67 Net income 15,172 360) S 14,812 0.36 S 0.34 Dividend preferred stock (related party) Basic earnings per common share Diluted earnings per common share Includes related-party sales of $6,559 for 2004 and $15,109 for 2003, respectively. Includes related-party purchases of 17,D7 for 2004 and $29,243 for 2003, respectively. Source: DHB Industries, Inc., 2004 Form 10-K DHB Industries, Inc. Balance Sheets 2003-2004 (000s omitted) December 31, 2003 Current assets: Cash and cash equivalents Accounts receivables (net) Inventories Defermed income tax assets Prepaid expenses and other current assets 498 47,425 38,231 19,094 $ 441 33,565 30,001 1,424 1,597 67,028 Total current assets 106,467 Property and equipment, net 2,371 Other assets: Deferred income tax assets Deposits and other assets 124 381 Total assets Current liabilities: Note payable current portion Accounts payable Accrued expenses and other current liabilities Income taxes payable Employment tax withholding obligation S10.500 8,004 9,015 4,931 29,718 62,168 2,000 9,642 5,776 118 Total current liabitities 18,273 Long-term liabilities: Note payable bank Other liablities 25,644 22,022 Total long-term liabilities 26,318 $88,486 22,549 $ 40,822 Total liabilities Minority interest in consolidated subsidiary Stockholders' equity: Convertible preferred stock Common stock Additional paid-in capital Retained deficit 3,000 3,000 41 62,089 (36,647) 63,776 46,152) Total stockholders' equity Total liabilities and stockholders' equity 69,304 Source: DHB Industries, Inc., 2006 Form 10-K