題組內容

4、The controller for Haley Corporation is concerned about certain business transactions that the company experienced during 2016. The controller, after discussing these matters with various individuals, has come to you for advice. The transactions at issue are presented below.

(2) Inventory has been shipped on consignment. These transactions have been recorded as ordinary sales and billed as such on account. At December 31, 2016, inventory billed and in the hands of consignees amounted to $400,000. The percentage markup on selling price is 20%. Assume that consigned inventory is sold the following year. The company uses the perpetual inventory system.
Instructions
Assume that Haley Corporation erroneously reported net income of $1,000,000 for 2016. What should be the correct net income for 2016?