Condensed Income Statements for Werly Corporation Are Shown Below for Two

question 46

Short Answer

Condensed income statements for Werly Corporation are shown below for two years. Compute the corrected net income for 2013 and 2014 assuming that the inventory as of the end of 2013 was mistakenly overstated by $5,000.
2013 $ __________ 2014 $__________

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Definitions:

At the Money

A term used in options trading to describe an option with a strike price that is identical or very close to the market price of the underlying security.

Employee Stock Options

The right granted to employees by a company to buy its shares at a discounted price or a specific price within a specified time period.

Underwater

A term often used in finance to describe a situation where an asset's market value is less than the balance owed on the loan used to purchase that asset.

American Option

A type of options contract that can be exercised at any time before its expiration date.