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31PGA_1

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Found in: Page 368

### Horngren'S Financial And Managerial Accounting

Book edition 6th
Author(s) Tracie L. Miller-Nobles, Brenda L. Mattison
Pages 992 pages
ISBN 9780134486833

## Step 3: Explanation for the above income statement

The income statement above has been corrected by making the ending inventory for2017 correct first. This correction has made the ending inventory for 2017 amount to \$37,000. Thus the opening inventory for 2018 has also become the same.

The above correction led to a change in the cost of goods sold and gross profit for 2017 and 2018.

In 2019 the ending inventory was again corrected for overestimation. This has affected the cost of goods sold and gross profit for 2019.