The shareholders are very happy with Boston’s steady increase in net income. However, auditors discovered that the for 2016 was understated by $6 million and that the for 2017 was understated by $7 million. The at December 31, 2018, was correct.
Requirements
1. Show corrected income statements for each of the three years.
2. How much did these assumed corrections add to or take away from Boston’s total net income over the three-year period? How did the corrections affect the trend of net income?
3. Will Boston’s shareholders still be happy with the company’s trend of net income? Explain.
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