Partial income statements of Lilydale Products Inc. are reproduced below:

Required:
1. Calculate the impact of the two errors listed below on the gross profit calculated for the three years:
a. The 2017 ending inventory was understated by $2,000.
b. The 2019 ending inventory was overstated by $5,000.
2. What is the impact of these errors on total assets?

Transcribed Image Text:

2017 2018 $30,000 $40,000 $50,000 23,000 2019 Sales Cost of Goods Sold 20,000 25,000 Gross Profit $10,000 $1700$5