| Boswell Electric prepared the following condensed income statements for two successive years: |
| 2011 | 2010 | |||
| Sales | $ | 3,000,000 | $ | 2,950,000 |
| Cost of goods sold | 1,300,000 | 1,000,000 | ||
|
|
|
|
|
|
| Gross profit on sales | $ | 1,700,000 | $ | 1,950,000 |
| Operating expenses | 400,000 | 450,000 | ||
|
|
|
|
|
|
| Net income | $ | 1,300,000 | $ | 1,500,000 |
|
|
|
|
|
|
|
|
||||
|
At the end of 2010 (right-hand column above), the inventory was understated by $27,000, but the error was not discovered until after the |
| a. | Compute the corrected net income figures for 2010 and 2011. (Omit the “$” sign in your response.) |
| 2011 | 2010 | |
| Corrected net income | $ | $ |
|
|
||
| b. |
Compute the gross profit amounts and the gross profit percentages for each year on the basis of corrected data. (Round your percentage answers to 2 decimal places. Omit the “$” and “%” signs in your response.) |
| 2011 | 2010 | |
| Gross profit amount | $ | $ |
| Gross profit percentage | % | % |
|
|
||
| c. | Which of the following statements is false? | ||||||
|
ScholarMatic: Explanation & Answer
Your ready answer from a verified tutor is just a click away for as little as $14.99
Click Order Now to get 100% Original Answer Customized to your instructions!
