Navajo Company\'s financial statements show the following The company recently d

Question

Navajo Company's financial statements show the following The company recently discovered that in making physical counts of inventory, it had made the following errors Inventory on December 31, 2014, is understated by $56,000, and inventory on December 31, 2015, is overstated by $20,000 S 615,000 957,000 S 780,000 230,000 285,000 241,000 ,255,000 1,365,000 1,200,000 1,387,000 1,530,000 1,242,000 a) Cost of goods sold (b) Net income c) Total current assets d) Total equity Required: 1. For each key financial statement figure-(a). (b). (c), and (d) below-prepare a table to show the adjustments necessary to correct the reported amounts. (Amounts to be deducted must be entered with a minus sign.) Cost of goods 2014 2015 2016 Reported amount Adjustments for | 12/31/2014 ??? 12/31/2015 error Corrected amount Net income Reported amount Adjustments for 12/31/2014 error 2014 2015 2016 1231/2015 error Corrected amount 2014 Total current assets Reported amount Adjustments for 12/31/2014 2015 2016 error 2/31/2015 error Corrected amount Equity Reported amount Adjustments for12/31/2014 error 2014 2015 2016 12/31/2015 error Corrected amount

Explanation / Answer

Cost of Goods Sold 2014 2015 2016 Reported Amount 615000 957000 780000 Adjusted for 12/31/2014Error -56000 56000 13/31/2015Error 0 20000 -20000 Corrected Amount 559000 1033000 760000 Net Income 2014 2015 2016 Reported Amount 230000 285000 241000 Adjusted for 12/31/2014Error 56000 -56000 13/31/2015Error 0 -20000 20000 Corrected Amount 286000 209000 261000 Total current assets 2014 2015 2016 Reported Amount 1255000 1365000 1200000 Adjusted for 12/31/2014Error 56000 13/31/2015Error -20000 Corrected Amount 1311000 1345000 1200000

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