At the start of 20X5, Souza Corp.'s beginning inventory was overstated by $10,000. In addition, during 20X5, Souza understated its net purchases by $4,000. The cost of ending inventory at 20X5 is correctly stated. Before reflecting any adjustments for the above error items, Souza's net income on its 20X5 income statement was $800,000. Question: What should Souza report as its corrected net income for 20X5?

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Corrected Net Income for Souza Corp Errors and Their Impact Overstated Beginning Inventory This infl... View the full answer