Response to the following :
Inventory Errors-Multiple Years
Refer to problem. Compute the correct amount of net income in year 2.
Problem:
Inventory Errors-Multiple Years
At the beginning of year 1, the company's inventory level was stated correctly. At the end of year 1, inventory was understated by $2,000. At the end of year 2, inventory was overstated by $450. Reported net income was $3,000 in year 1 and $3,000 in year 2. Compute the correct amount of net income in year 1.