Griffin Corporation prepared the following two income statements (simplified for illustrative purposes): During the third quarter, it

Question:

Griffin Corporation prepared the following two income statements (simplified for illustrative purposes):

During the third quarter, it was discovered that the ending inventory for the first quarter should have been $4,280.


Required:
1. What effect did this error have on the combined pretax income of the two quarters? Explain.
2. Did this error affect the EPS amounts for each quarter? Explain.
3. Prepare corrected income statements for each quarter.
4. Set up a schedule with the following headings to reflect the comparative effects of the correct and incorrect amounts on the income statement:

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Financial Accounting

ISBN: 9781264229734

11th Edition

Authors: Robert Libby, Patricia Libby, Frank Hodge

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