The statements of earnings for Pruitt Company summarized for a four- year period show the following (amounts
An audit revealed that in determining these amounts, the ending inventory for 2013 was understated by $ 22.
1. Revise these statements of earnings to reflect the correct amounts.
2. Did the error affect the cumulative net earnings for the four- year period? Explain.
3. What effect did the error have on the income tax expense for 2013 and 2014?
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
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