Interior Design, Inc., reported the following comparative income statements for the years ended April 30, 2018,...

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Interior Design, Inc., reported the following comparative income statements for the years ended April 30, 2018, and April 30, 2017. (Click the icon to view the comparative income statements.) During 2018, Interior Design, Inc., discovered that the 2017 ending inventory, as previously reported, was overstated by $3,000. Read the requirements. Requirement 1. Prepare the corrected comparative income statements for the two-year period, complete with a heading for the statements Interior Design, Inc. Comparative Income Statements For the Years Ended April 30, 2018 and 2017 Sales revenue Cost of goods sold: Beginning inventory Net purchases Cost of goods available Ending inventory Cost of goods sold Gross profit $ 2018 10,000 73,000 GETTR 83,000 19,000 $ 134,000 64,000 70,000 2017 11,000 71.000 82,000 10,000 $ 115,000 72.000 43,000 Interior Design, Inc., reported the following comparative income statements for the years ended April 30, 2018, and April 30, 2017. (Click the icon to view the comparative income statements.) During 2018, Interior Design, Inc., discovered that the 2017 ending inventory, as previously reported, was overstated by $3,000. Read the requirements. Cost of goods sold: Beginning inventory Net purchases Cost of goods available Ending inventory Cost of goods sold $ 10,000 73,000 83,000 19,000 SCOOP 64,000 70,000 25,000 45,000 $ 11,000 71,000 82,000 10,000 72,000 43,000 21,000 22,000 Gross profit Operating expenses Net income Requirement 2. What was the effect of the error on net income for the two years combined? Explain your answer. Net income for the two years combined in the revised comparative income statements is the same as net income for the two years combined in the original comparative income statements. This is because the 2017 ending inventory becomes the 2018's beginning inventory. As a result the error cancels out after two periods. Data table Interior Design, Inc. Comparative Income Statements For the Years Ended April 30, 2018 and 2017 2018 Sales revenue Cost of goods sold: Beginning inventory Net purchases Cost of goods available for sale Ending inventory Cost of goods sold Gross profit Operating expenses Net income $ 13,000 73,000 86,000 19,000 $ 134,000 67,000 67,000 25,000 $ 42,000 2017 $ 11,000 71,000 82,000 13,000 $ 115,000 $ 69,000 46,000 21,000 25,000 I Interior Design, Inc., reported the following comparative income statements for the years ended April 30, 2018, and April 30, 2017. (Click the icon to view the comparative income statements.) During 2018, Interior Design, Inc., discovered that the 2017 ending inventory, as previously reported, was overstated by $3,000. Read the requirements. Requirement 1. Prepare the corrected comparative income statements for the two-year period, complete with a heading for the statements Interior Design, Inc. Comparative Income Statements For the Years Ended April 30, 2018 and 2017 Sales revenue Cost of goods sold: Beginning inventory Net purchases Cost of goods available Ending inventory Cost of goods sold Gross profit $ 2018 10,000 73,000 GETTR 83,000 19,000 $ 134,000 64,000 70,000 2017 11,000 71.000 82,000 10,000 $ 115,000 72.000 43,000 Interior Design, Inc., reported the following comparative income statements for the years ended April 30, 2018, and April 30, 2017. (Click the icon to view the comparative income statements.) During 2018, Interior Design, Inc., discovered that the 2017 ending inventory, as previously reported, was overstated by $3,000. Read the requirements. Cost of goods sold: Beginning inventory Net purchases Cost of goods available Ending inventory Cost of goods sold $ 10,000 73,000 83,000 19,000 SCOOP 64,000 70,000 25,000 45,000 $ 11,000 71,000 82,000 10,000 72,000 43,000 21,000 22,000 Gross profit Operating expenses Net income Requirement 2. What was the effect of the error on net income for the two years combined? Explain your answer. Net income for the two years combined in the revised comparative income statements is the same as net income for the two years combined in the original comparative income statements. This is because the 2017 ending inventory becomes the 2018's beginning inventory. As a result the error cancels out after two periods. Data table Interior Design, Inc. Comparative Income Statements For the Years Ended April 30, 2018 and 2017 2018 Sales revenue Cost of goods sold: Beginning inventory Net purchases Cost of goods available for sale Ending inventory Cost of goods sold Gross profit Operating expenses Net income $ 13,000 73,000 86,000 19,000 $ 134,000 67,000 67,000 25,000 $ 42,000 2017 $ 11,000 71,000 82,000 13,000 $ 115,000 $ 69,000 46,000 21,000 25,000 I

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Answer 1 The corrected income statements is as above 2 Before the co... View the full answer