Antique Carpets books show the following data. In early 2026, auditors found that the ending merchandise inventory

Question:

Antique Carpets’ books show the following data. In early 2026, auditors found that the ending merchandise inventory for 2023 was understated by $8,000 and that the ending merchandise inventory for 2025 was overstated by $9,000. The ending merchandise inventory at December 31, 2024, was correct.


Requirements
1. Prepare corrected income statements for the three years.
2. State whether each year’s net income—before your corrections—is understated or overstated, and indicate the amount of the understatement or overstatement.
3. Compute the inventory turnover and days’ sales in inventory using the corrected income statements for the three years. (Round all numbers to two decimals.)

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Horngrens Accounting The Financial Chapters

ISBN: 9780136162186

13th Edition

Authors: Tracie Miller Nobles, Brenda Mattison

Question Posted: