The Community Store Reported the Following Amounts on Their Financial

question 176

Essay

The Community Store reported the following amounts on their financial statements for Year 1, Year 2, and Year 3:
$$\begin{array} {r} { \text { Far the year ended } } \\ { \text { December 31 } } \\\begin{array}{ | l | r | r | r | } \hline & \text { Year 1 } & \text { Year 2 } & \text { Year 3 } \\\hline \text { Cost of goods sold } & \$ 75,000 & \$ 87,000 & \$ 77,000 \\\hline \text { Net income } & 22,000 & 25,000 & 21,000 \\\hline \text { Total current assets } & 155,000 & 165,000 & 110,000 \\\hline \text { Equity } & 287,000 & 295,000 & 304,000 \\\hline\end{array}\end{array}$$ It was discovered early in Year 4 that the ending inventory on December 31, Year 1 was overstated by $6,000, and the ending inventory on December 31, Year 2 was understated by $2,500. The ending inventory on December 31, Year 3 was correct. Ignoring income taxes determine the correct amounts of cost of goods sold, net income, total current assets, and equity for each of the years Year 1, Year 2, and Year 3.

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Definitions:

Tranquilizers

Medications used to reduce tension or anxiety, often by depressing central nervous system activities.

Mood Stabilizers

Medications used to treat mood disorders, such as bipolar disorder, by stabilizing emotional highs and lows.

Antipsychotic Drugs

Medications primarily used to manage psychosis, including delusions, hallucinations, and disorders like schizophrenia.

Antianxiety Drugs

Medications prescribed to reduce or manage anxiety symptoms.