Reference no: EM13607466

The income statements of Diamond Company for the years ended Decem¬ber 31, 19X1, and 19X2 follow. 19X1 19X2 Net sales Cost of goods sold Beginning inventory Add: Net purchases $ 95,000 380,000 $440,000 $109,000 404,000 $483,000 Goods available for sale Less: Ending inventory $475,000 109,000 $513,000 127,000 Cost of goods sold 366,000 386,000 Gross profit Operating expenses $ 74,000 58,000 $ 97,000 67,000 Net income $ 16,000 $ 30,000 Diamond uses a periodic inventory system. A detailed review of the accounting records disclosed the following: a. A review of 19X1 purchase invoices revealed that a clerk had incor¬rectly recorded a $12,600 purchase as $1,260. b. A $4,800 purchase was made on December 30, 19X2, terms F.O.B. ship¬ping point. The invoice was not recorded in 19X2 nor were the goods included in the 19X2 ending physical inventory count. Both the goods and invoice were received in early 19X3, with the invoice being re¬corded at that time. c. Goods costing $3,000 were accidentally excluded from the 19X1 ending physical inventory count. These goods were sold during 19X2, and all aspects of the sale were properly recorded. Instructions: Prepare corrected income statements for 19X1 and 19X2. Determine the impact of the preceding errors on the December 31, 19X2, owner's equity balance.