Great Foods Grocery reported the following comparative income statement for the years ended June 30, 2012 and
Question:
During 2012, Great Foods discovered that ending 2011 inventory was overstated by $4,500.
Requirements
1. Prepare corrected income statements for the two years.
2. State whether each years net incomebefore your correctionsis understated or overstated and indicate the amount of the understatement oroverstatement.
Transcribed Image Text:
GREAT FOODS GROCERY Income Statements Years Ended June 30, 2012 and 2011 2012 2011 $ 139,000 $ 120,000 Sales revenue Cost of goods sold: Beginning inventory $12,000 $13,000 Net purchases 76,000 70,000 $89,000 Cost of goods available $82,000 Ending inventory (17,000) (13,000) Cost of goods sold Gross profit Operating expenses 69,000 $ 51,000 72,000 $ 67,000 23,000 18,000 $ 44,000 $ 33,000 Net income
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Related Book For
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
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