Sinclair Auto Parts, Inc., reported the following comparative income statement for the years ended September 30, 2012
Question:
During 2012, Sinclair Auto Parts, Inc., discovered that the 2011 ending inventory, as previously reported, was understated by $4,500.
Requirements
1. Prepare the corrected comparative income statement for the two-year period, complete with a heading for the statement.
2. What was the effect of the error on net income for the two years combined? Explain youranswer.
Transcribed Image Text:
Sinclair Auto Parts, Inc. Comparative Income Statements For the Years Ended September 31, 2012 and 2011 2012 2011 Sales Revenue Cost of Goods Sold $135,000 $124,000 Beginning Inventory$19,000 Net Purchases Cost of Goods Available 91,000 Ending Inventory Cost of Goods Sold $10.500 69.000 79,500 19,000 18,500 72,500 62,500 24.000 $ 38,500 60,500 63,500 Gross Profit Operating Expenses Net Income S 46,500
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