Required information [The following information applies to the questions displayed below.] The income statement for Pruitt Company summarized for a four-year period shows the following: 2016 $ 2,027,000 1,492,000 535,000 473,000 62,000 21,700 2017 $ 2,451,000 1,616,000 835,000 505,000 330,000 115,500 2019 $ 2,979,000 2,101,000 878,000 537,000 341,000 119,350 2018 $ 2,704,000 1,770,000 934,000 519,000 415,000 145,250 Sales revenue Cost of goods sold Gross profit Expenses Pretax income Income tax expense (35%) Net income $ 40,300 $ 214,500 $ 269,750 $ 221,650 An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $27,000. The company uses a periodic inventory system. 2. Compute the gross profit percentage for each year before the correction and after the correction. (Round your answers to the nearest whole percent.) 2016 2017 2018 2019 Before correction % % After correction % % % %

Required information [The following information applies to the questions displayed below.] The income statement for Pruitt Company summarized for a four-year period shows the following: 2016 $ 2,027,000 1,492,000 535,000 473,000 62,000 21,700 2017 $ 2,451,000 1,616,000 835,000 505,000 330,000 115,500 2019 $ 2,979,000 2,101,000 878,000 537,000 341,000 119,350 2018 $ 2,704,000 1,770,000 934,000 519,000 415,000 145,250 Sales revenue Cost of goods sold Gross profit Expenses Pretax income Income tax expense (35%) Net income $ 40,300 $ 214,500 $ 269,750 $ 221,650 An audit revealed that in determining these amounts, the ending inventory for 2017 was overstated by $27,000. The company uses a periodic inventory system. 2. Compute the gross profit percentage for each year before the correction and after the correction. (Round your answers to the nearest whole percent.) 2016 2017 2018 2019 Before correction % % After correction % % % %

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 18E

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