Question

The net income per books of Helen Martin Company was determined without knowledge of the errors indicated below.

Year		Net Income per Books		Error in Ending Inventory
2015		$48,800		Overstated		$ 3,240
2016		50,890		Overstated		8,900
2017		52,810		Understated		10,750
2018		54,840		No error
2019		56,640		Understated		1,890
2020		58,620		Overstated		7,450

Prepare a worksheet to show the adjusted net income figure for each of the 6 years after taking into account the inventory errors.

Errors in Inventories
Year		Net Income Per Books		Overstatement Jan. 1		Understatement Jan. 1		Overstatement Dec. 31		Understatement Dec. 31		Corrected Net Income
2015		$48,800		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
2016		50,890		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
2017		52,810		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
2018		54,840		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
2019		56,640		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
2020		58,620		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
		$enter a total amount

Answer 1

Year		Net Income (A)		Overstatement (B)		Understatement ©		Overstatement (D)		Understatement ( E)		Corrected Net (A+B+C+D+E)
		Per Books		Jan. 1		Jan. 1		Dec. 31		Dec. 31		Income
2015		$48,800						-3240				$45,560
2016		50,890		3240				-8900				45,230
2017		52,810		8900						10750		72,460
2018		54,840				-10750						44,090
2019		56,640								1890		58,530
2020		58,620				-1890		-7450				49,280