2. Did the error affect the cumulative net earnings for the four-year period? 0 Not affected 0 Affected 3.
What effect did the error have on the income tax expense for 2022 and 2023? (Do not round
intermediate calculations. Round the final answers to the nearest dollar amount.)

 

The statements of earnings for Pruitt Company summarized for a four-year period show the following (amounts in thousands of dollars): 2024 2023 2022 2021 Sales revenue $3,625 $4,050 $4,300 $4,575 Cost of sales 2,305 2,427 2,582 2,913 Gross profit 1,320 1,623 1,718 1,662 Operating expenses 650 673 698 702 Pretax earnings 670 950 1,020 960 Income tax expense (30%) 201 285 306 288 Net earnings $ 469 $ 665 $ 714 $ 572 An audit revealed that in determining these amounts, the ending inventory for 2022 was understated by $54. Required: 1. Revise these statements of earnings to reflect the correct amounts. (Do not round intermediate calculations. Round the final answers to the nearest dollar amount.) Cost of sales Gross profit Sales revenue

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2. Compute the gross profit for the first six months of the current year by using the FIFO costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Gross profit 3. Would the gross profit be higher, lower, or the same if Neverstop used the weighted-average costing method rather than the FIFO method? O Remain the same O Lower O Higher 4. Prepare journal entries to record the purchase and sale transactions, as well as the cost of sales, assuming that all sales and purchase transactions are on account and that the weighted-average method is used. (Do not round intermediate calculations and round the final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Compute the gross profit for the first six months of the current year by using the FIFO costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Gross profit 3. Would the gross profit be higher, lower, or the same if Neverstop used the weighted-average costing method rather than the FIFO method? O Remain the same O Lower O Higher 4. Prepare journal entries to record the purchase and sale transactions, as well as the cost of sales, assuming that all sales and purchase transactions are on account and that the weighted-average method is used. (Do not round intermediate calculations and round the final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)