Your analysis of inventory indicates that inventory at the end of 2020 was overstated by $29,000...
- Your analysis of inventory indicates that inventory at the end of 2020 was overstated by $29,000 due to an inventory count error. Inventory at the end 0f 2021 was correctly stated.
- Invoices in the amount of $82,000 for inventory received in December 2020 were not entered on the books 2020. They were recorded as purchases in January 2021 when they were paid. The goods were counted in the 2020 inventory count and included in ending inventory on the 2020 financial statements.
- Goods of received on consignment amounting to $95,000 were included in the physical count of goods at the end of 2021 and included in ending inventory on the financial statements
2020 Income 2021 income 2021 closing retained earning
Scenario Misstated? Amount ? Misstated? Amount ? Mistated? Amount ?
a) ? ? ? ? ? ?
b) ? ? ? ? ? ?
c) ? ? ? ? ? ?
Homework Answers
Solution:
| Scenario | 2020 Income | 2021 Income | 2021 Closing Retained Earnings | |||
| Misstated | Amount | Misstated | Amount | Misstated | Amount | |
| a | Yes | $29,000.00 | Yes | $29,000.00 | No | |
| b | Yes | $82,000.00 | Yes | $29,000.00 | No | |
| c | No | Yes | $95,000.00 | Yes | $95,000.00 | |
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