Question

.During the taking of its physical inventory on December 31, 2014, Barrys Bike Shop incorrectly counted its inventory as $35
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Answer #1

ANSWER:

Here the inventory has been over stated by an amount:

$350000 - $280000 = $70000

Effect:

Due to above error, inventory, gross profit , current assets, net income, retained earnings are overstated by $70000

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