Homework Answers
Solution
| Its cost of goods sold for 20X5 will : | Overstated |
| Its ending retained earnings balance for 20X5 will: | Understated |
| Its net Income for 20X5 will: | Understated |
Working note
When ending inventory is understated then cost of goods sold will be overstated hence the net income will be understated because now the cost is higher then the actual cost. Net income is directly added to retained earnings so if net income is understated then retained earnings will be understated as well.
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Assume that due to an error during the count of its physical inventory, a company understated...
Cage Trading Inc. counted $2,000 of inventory twice during its December 31, 2016 physical inventory count....
Cage Trading Inc. counted $2,000 of inventory twice during its December 31, 2016 physical inventory count. Its December 31, 2017 inventory amount is correct. As a result of this error, 2016 ending inventory is overstated by $2,000. 2016 income is understated by $2,000. 2017 income is overstated by $2,000. 2017 cost of goods sold is understated by $2,000. Question 4 2 pts Kemp Clothing has cost of goods sold of $14,000 with beginning and ending inventories of $4.000 and $2,000....
QUESTION 2 An error in the physical count of goods on hand at the end of...
QUESTION 2 An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is Cost of Goods Sold Understated Net Income Understated Cost of Goods Sold Overstated Net Income Overstated Cost of Goods Sold Understated Net Income Overstated Cost of Goods Sold Overstated Net Income Understated
During the taking of its physical inventory on December 31, Almond upplies Company incorrectly counted its...
During the taking of its physical inventory on December 31, Almond upplies Company incorrectly counted its inventory as $545,000 instead of the correct amount of $554,000. Indicate the balance sheet effects of the error on inventory, current assets, total assets and stockholders uity, Nisa indicate the income statement effects of the error on cost of goods sold, gross profit, and net income. For those boxes in which you must enter understatements or negative numbers na minus sign Amount of Misstatement...
A company understated its ending inventory balance by $8,000 in 2021. What impact will this error have on cost of good...
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A company understated its ending Inventory balance by $9,000 in 2021. What impact will this error...
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The December 31, 2018, inventory of Tog Company, based on a physical count, was determined to be $450,000. Included in...
The December 31, 2018, inventory of Tog Company, based on a physical count, was determined to be $450,000. Included in that count was a shipment of goods received from a supplier at the end of the month that cost $50,000. The purchase was recorded and paid for in 2019. Another supplier shipment costing $20,000 was correctly recorded as a purchase in 2018. However, the merchandise, shipped FOB shipping point, was not received until 2019 and was incorrectly omitted from the...
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Effect of Errors in Physical Inventory Fonda Motorcyde Shop sells motorcydes, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20YB, Fonda Motorcycle Shop incorrectly counted its inventory as $431,390 instead of the correct amount of $414,130. Enter all amounts as positive numbers. a. State the effect of the error on the December 31, 20Y8, balance sheet of Fonda Motorcycle Shop Balance Sheet Items Overstated/Understated Amount Merchandise Inventory Current Assets Total Assets...
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies...
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20Y8, Fonda Motorcycle Shop incorrectly counted its inventory as $229,310 instead of the correct amount of $220,140. Enter all amounts as positive numbers. a. State the effect of the error on the December 31, 20Y8, balance sheet of Fonda Motorcycle Shop. Balance Sheet Items Overstated/Understated Amount Merchandise Inventory $ Current Assets Total...
Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies...
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Effect of Errors in Physical Inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies...
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Cage Trading Inc. counted $2,000 of inventory twice during its December 31, 2016 physical inventory count. Its December 31, 2017 inventory amount is correct. As a result of this error, 2016 ending inventory is overstated by $2,000. 2016 income is understated by $2,000. 2017 income is overstated by $2,000. 2017 cost of goods sold is understated by $2,000. Question 4 2 pts Kemp Clothing has cost of goods sold of $14,000 with beginning and ending inventories of $4.000 and $2,000....
QUESTION 2 An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is Cost of Goods Sold Understated Net Income Understated Cost of Goods Sold Overstated Net Income Overstated Cost of Goods Sold Understated Net Income Overstated Cost of Goods Sold Overstated Net Income Understated
During the taking of its physical inventory on December 31, Almond upplies Company incorrectly counted its inventory as $545,000 instead of the correct amount of $554,000. Indicate the balance sheet effects of the error on inventory, current assets, total assets and stockholders uity, Nisa indicate the income statement effects of the error on cost of goods sold, gross profit, and net income. For those boxes in which you must enter understatements or negative numbers na minus sign Amount of Misstatement...
A company understated its ending inventory balance by $8,000 in 2021. What impact will this error have on cost of goods sold and gross profit in 2021 and 2022? Cost of goods sold Gross profit Understated Understated 1 $ $ 2021 8,000 8,000 Cost of goods sold Gross profit Not affected Not affected 2022 $ S 0 0
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The December 31, 2018, inventory of Tog Company, based on a physical count, was determined to be $450,000. Included in that count was a shipment of goods received from a supplier at the end of the month that cost $50,000. The purchase was recorded and paid for in 2019. Another supplier shipment costing $20,000 was correctly recorded as a purchase in 2018. However, the merchandise, shipped FOB shipping point, was not received until 2019 and was incorrectly omitted from the...
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