Compute the gross profit percentage for all four quarters

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Partial income statements for Murphy & Murphy (M & M) reported the following summarized amounts:

After these amounts were reported, M & M's accountant determined that the inventory at the end of Quarter 2 was understated by $ 3,000. The inventory balance at the end of the other three quarters was accurately stated.

Required:

1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error.

2. Compute the gross profit percentage for all four quarters both (a) before the correction and (b) after the correction. Does the pattern of gross profit percentages lend confidence to your corrected amounts? Explain. Round your answer to the nearest percentage.

Reference no: EM13872258

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