(SOLVED) The accounting records of Waterville Video Sales show these data


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The accounting records of Waterville Video Sales show these data (in millions). The shareholders are very happy with Waterville’s steady increase in net income._x0001_Auditors discovered that the ending inventory for 2008 was understated by $2 million and that the ending inventory for 2009 was also understated by $2 million. The ending inventory at December 31, 2010 was correct.Requirements1. Show corrected income statements for each of the three years.2. How much did these assumed corrections add to or take away from Waterville’s total net income over the three-year period? How did the corrections affect the trend of net income?3. Will Waterville’s shareholders still be happy with the company’s trend of net income?Give the reason for youranswer.

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