Sideline Company Reported Net Income for 2010 of $70,000 and in 2011

question 25

Essay

Sideline Company reported net income for 2010 of $70,000 and in 2011 of $84,000 (both after income taxes at a 30% rate).It was discovered in 2011 that the ending inventory for 2010 was understated by $2,000 (before any income tax effect).Calculate the correct net income (after income tax of 20%)for 2009 and 2010.

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Definitions:

Torso

The central part of the human body to which the head, arms, and legs are attached; it includes the chest, back, and abdomen.

Ears

Organs of hearing and balance in humans and other vertebrates, responsible for detecting sound waves and converting them into signals that can be processed by the brain.

Feet

The lower extremity of the leg below the ankle, on which a person stands or walks.

Leptin

A hormone that affects appetite and is believed to affect the onset of puberty. Leptin levels increase during childhood and peak at around age 12.