Purpose: This exercise will enable you to practice identifying the effects of inventory errors on the financial statements.
The net income per books of Wacky Wicks Company was determined without knowledge of the errors indicated.
|
Year
|
Net Income Per Books
|
Error in Ending Inventory
|
|
2011
|
$ 150,000
|
Overstated $ 9,000
|
|
2012
|
156,000
|
Overstated 21,000
|
|
2013
|
162,000
|
Understated 33,000
|
|
2014
|
168,000
|
No error
|
Instructions
Compute the correct net income figure for each of the four years after taking into account the inventory errors.