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Oriole Inc. reported total assets of $6392000 and net income of $500000 for the current year. Oriole determined that inventory was understated by $137000 at the beginning of the year and $58900 at the
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35 votes
35 votes
Oriole Inc. reported total assets of $6392000 and net income of $500000 for the current year. Oriole determined that inventory was understated by $137000 at the beginning of the year and $58900 at the end of the year. Ignoring income taxes, what is the corrected amount for total assets and net income for the year

User Tombola
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1 Answer

20 votes
20 votes

Answer:

Income = $421900

Assets = $6450900

Step-by-step explanation:

Given below are the following calculation:

The net impact of assets = 137000 - 58900 = 78100

Deduct this amount from current year income = 500000 - 78100 = $421900

When closing stock is understated by 58900 then total assets value will decrease so add this amount = 639200 + 58900 = 6450900

User Ishita
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