Question

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

Year		Net Income per Books				Error in Ending Inventory
2015			$52,000			Overstated		$ 3,020
2016			54,000			Overstated		9,590
2017			56,140			Understated		10,580
2018			58,070			No error
2019			59,900			Understated		1,970
2020			61,910			Overstated		8,490

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		$52,000		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
2016		54,000		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
2017		56,140		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
2018		58,070		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
2019		59,900		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
2020		61,910		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

Worksheet-Laura Hall Company
				Errors in Inventories
Year		Net Income		Overstatement		Understatement		Overstatement		Understatement		Corrected Net
Per Books	Jan. 1	Jan. 1	Dec. 31	Dec. 31	Income
2015		$52,000.00						-$3,020.00				$48,980.00
2016		$54,000.00		$3,020.00				-$9,590.00				$47,430.00
2017		$56,140.00		$9,590.00						$10,590.00		$76,320.00
2018		$58,070.00				-$10,590.00						$47,480.00
2019		$59,900.00								$1,970.00		$61,870.00
2020		$61,910.00				-$1,970.00		-$8,490.00				$51,450.00