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(Learning Objective 6: Analyze the effects of inve

(Learning Objective 6: Analyze the effects of inventory errors) The accounting records of Downton Home Store show these data (in millions). The shareholders are very happy with Downton’s steady increase in net income.Auditors discovered that the ending inventory for 2012 was understated by $5 million and that the ending inventory for 2013 was understated by $3 million. The ending inventory at December 31, 2014, was correct.

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