Navajo Company discovered errors in its physical inventory counts for Year 1 and Year 2. Year 1 ending inventory was understated by $69,000 and Year 2 ending inventory was overstated by $39,000. The document asks to prepare a table showing the adjustments needed to correct the reported financial statement figures for Years 1, 2 and 3, and to calculate the total error in net income over the three-year period due to the inventory errors.

1. Navajo Company's financial statements show the following The company recently discovered
that in making physical counts of inventory. it had made the following errors. Year 1 ending
inventory is understated by $69,000, and Year 2 ending inventory is overstated by $39.000
Required: 1. For each key financial statement figure- ( (b). (b),(c), and ( ( b) below-prepore a
table to show the adjustments necessary to carrect the reported amounts 2. What is the total error
in combined net income for the three-yeor period reculting from the inventory errors?
For each key financial statement figure- (a),(b),(c), and (d) below-prepare a table to show the
adjustments necessary to correct the reported amounts. (Amounts to be deducted must be entered
with a minus sign.)
Complete this question by entering your answers in the tabs below. What is the error in total net
income for the combined three-year period resulting from the inventory errons