Sideline Company Reported Net Income for 2015 of $70,000 and in 2016

question 71

Essay

Sideline Company reported net income for 2015 of $70,000 and in 2016 of $84,000 (both after income taxes at a 30% rate). It was discovered in 2016 that the ending inventory for 2015 was understated by $2,000 (before any income tax effect).
Required:
Calculate the correct net income (after income tax of 30%) for 2015 and 2016

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Definitions:

File System

The method and structure by which data is stored, organized, and accessed on a storage device, such as a hard drive or solid-state drive, within a computer or mobile device.

Encryption

A method of securing data from unauthorized users in which data is converted into an unreadable format.

Compression

Compaction of a file or folder to take up less disk drive space.

GUI

Graphical User Interface, a user-friendly visual interface that allows users to interact with electronic devices through graphical icons and visual indicators.