Inventory Errors Video Lessons

Concept

# Problem: Wilmington Company reported pretax income amounts of: 2007, $25,000; and 2008,$30,000. Later it was discovered that the ending inventory for 2007 was understated by $2,000 (and not corrected in 2008). The correct pretax income for each year was: a. 2007 -$23,000; 2008 - $32,000. b. 2007 -$27,000; 2008 - $32,000. c. 2007 -$27,000; 2008 - $28,000. d. 2007 -$23,000; 2008 - $28,000. e. None of the above is correct. ###### FREE Expert Solution ###### Problem Details Wilmington Company reported pretax income amounts of: 2007,$25,000; and 2008, $30,000. Later it was discovered that the ending inventory for 2007 was understated by$2,000 (and not corrected in 2008). The correct pretax income for each year was:

a. 2007 - $23,000; 2008 -$32,000.

b. 2007 - $27,000; 2008 -$32,000.

c. 2007 - $27,000; 2008 -$28,000.

d. 2007 - $23,000; 2008 -$28,000.

e. None of the above is correct.