Empire State Carpets's books show the following data. In early 2020, auditors found that the ending merchandise

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Empire State Carpets's books show the following data. In early 2020, auditors found that the ending merchandise inventory for 2017 was understated by $8,000 and that the ending merchandise inventory for 2019 was overstated by $9,000. The ending merchandise inventory at December 31, 2018, was correct.
2019 2018 2017 Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory Net Cost of Purchases Cost of Goods

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.)

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Horngrens Financial And Managerial Accounting The Financial Chapters

ISBN: 9780134486840

6th Edition

Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura

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