State whether each years net income before your corrections

Reference no: EM13568407

Antique Carpets' books show the following data (in thousands). In early 2013, auditors found that the ending inventory for 2010 was understated by $8 thousand and that the ending inventory for 2012 was overstated by $9 thousand. The ending inventory at December 31, 2011, was correct.

(Thousands)	2012		2011		2010
Net sales revenue	$206		$160		$175
cost of goods sold
beginning inventory	$19		$23		$43
net purchaes	138		95		81
cost of goods available	157		118		124
ending inventory	(30)		(19)		(23)
cost of goods sold		127		99		101
gross profit		79		61		74
operating expenses		52		37		34
net income		$27		$24		$40

Requirements

R1. Prepare corrected income statements for the three years.

R2. State whether each year's net income before your corrections is understated or overstated and indicate the amount of the understatement or overstatement.

Reference no: EM13568407

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