In early 2003, Bristol-Myers Squibb announced that it would have to restate its financial statements as a result of stuffing as much as $3.35 billion worth of products into wholesalers’ warehouses from 1999 through 2001. The company’s sales and cost of sales during this period was as follows:

The company’s marginal tax rate during the three years was 35%. What adjustments are required to correct Bristol-Myers Squibb’s balance sheet for December 31, 2001? What assumptions underlie your adjustments? How would you expect the adjustments to affect Bristol-Myers Squibb’s performance in the coming few years?

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1999 2000 S18,139 $17,695 S16,502 5,454 4,729 4,458 2001 Net sales Cost of products sold