Darlington Inc

question 5

Essay

Darlington Inc.reported the following amounts on their financial statements for Year 1,Year 2 and Year 3:
 

It was discovered early in Year 4 that the ending inventory at the end of Year 1 was overstated by $6,000 and the ending inventory at the end of Year 2 was understated by $2,500.The ending inventory at the end of Year 3 was correctly reported.
Required:
Ignoring income taxes,determine the correct amounts of cost of goods sold and net income for each of the three years and total assets at the end of each the three years and complete the table below.Show your work.

Supporting calculations:

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Definitions:

Acute

Describing a condition or illness that begins suddenly and is often severe, but usually short-lived.

Coded

Processed or marked with a system of symbols or numbers for the purposes of identification or classification, especially in medical and data contexts.

Amebic Appendicitis

Inflammation of the appendix caused by an amoebic infection, a less common form of appendicitis.

Reported Code

The indicator or numerical/alphabetical value assigned to a particular condition, finding, or diagnosis for reporting purposes.