(Learning Objective 6: Analyze the effect of an inventory error) Lake Travis Marine Supply reported the following comparative income statements for the years ended June 30, 2014, and 2013:
Lake Travis’s president and shareholders are thrilled by the company’s boost in sales and net income during 2014. Then the accountants for the company discover that ending 2013 inventory was understated by $7,000. Prepare the corrected comparative income statements for the two-year period, complete with a heading for the statements. How well did Lake Travis really perform in 2014 as compared with 2013?