Necessary Toys Company's condensed income state- ments for two years follow.
| |
2014 |
2013 |
|
Sales
|
$252,000
|
$210,000
|
|
Cost of goods sold
|
150,000
|
108,000
|
|
Gross margin
|
$102,000
|
$102,000
|
|
Operating expenses
|
60,000
|
60,000
|
|
Income before income taxes
|
$ 42,000
|
$ 42,000
|
After the end of 2014, the company discovered that an error had resulted in an $18,000 understatement of the 2013 ending inventory.
Compute the corrected operating income for 2013 and 2014. What effect will the error have on operating income and stockholders' equity for 2015?