Can someone please provide a detailed explanation of the solution
Homework Answers
Ending inventory overstated means ending inventory is shown at higher price. When ending inventory is higher than Cost of Goods Sold will decreases and net income will increase of that year.
But in next year Opening inventory will be at higher site so Cost of Goods Sold will be higher site at net revenue will be decrease in that year.
In above given statement ending inventory is overstated by $ 22,000 it will impact as below,
|
Year |
Inventory |
Cost of Goods Sold |
Stockholder’s Equity |
|
2018 |
Increase by $ 22,000 |
Decrease |
Increases |
|
2019 |
Decrease by $ 22,000 |
Increase |
Decreases |
Add Answer to:
Can someone please provide a detailed explanation of the solution DO IT! 3 Inventory Errors Visual Company overstated...
TULUI 30,000 30,000 Glacier made two errors: (1) 2020 ending inventory was overstated by $5,500, and...
TULUI 30,000 30,000 Glacier made two errors: (1) 2020 ending inventory was overstated by $5,500, and (2) 2021 ending inventory was understated by $4,000. Instructions a. Calculate the correct cost of goods sold and ending inventory for each year. b. Describe the impact of the errors on profit for 2020 and 2021 and on owner's equity at the end of 2020 and 2021. c. Explain why it is important that Glacier Fishing Gear correct these errors as soon as they...
Learning Objectives 5, 6 P6-31A Correcting inventory errors over a three-year period and computing inventory turnover...
Learning Objectives 5, 6 P6-31A Correcting inventory errors over a three-year period and computing inventory turnover and days' sales in inventory Empire State Carpets's books show the following data. In early 2020, auditors found that the ending merchandise inventory for 2017 was understated by $8,000 and that the ending merchandise inventory for 2019 was overstated by $9,000. The ending mer chandise inventory at December 31, 2018, was correct. 2. 2019, overstated $9,000 2019 2018 2017 Net Sales Revenue Cost of...
Errors in Inventory Counts The following information was taken from the records of Tinker Enterprises: Beginning...
Errors in Inventory Counts The following information was taken from the records of Tinker Enterprises: Beginning inventory Cost of goods purchased Cost of goods available for sale Ending inventory Cost of goods sold 2019 2018 $60,000 $50,000 420,000 400,000 480,000 450,000 55,000 60,000 $425,000 $390,000 The following two errors were made in the physical inventory counts: 1. 2018 ending inventory was understated by $8,000. 2. 2019 ending inventory was overstated by $4,000. Compute the correct cost of goods sold for...
Help Save G. Ex A company overstated its ending inventory balance by $7000 in 2021 What...
Help Save G. Ex A company overstated its ending inventory balance by $7000 in 2021 What impact will this error have on cost of goods sold and gross profit in 2021 and 20222 Cost of goods sold Gross profit 2022 Cost of goods sold Gross profit
Effect of Errors in Physical Inventory Fonda Motorcyde Shop sells motorcydes, ATVs, and other related supplies...
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 Madison River Supply Co. sells canoes, kayaks, whitewater rafts, and...
Effect of Errors in Physical Inventory Madison River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking o its physical inventory on December 31, 2048, Madison incorrectly counted its inventory as $444,650 instead of ti correct amount of $457,990. Enter all amounts as positive numbers. a. State the effects of the error on the December 31, 2018, balance sheet of Madison River Supply. Balance Sheet Items Understated/Overstated Amount Inventory Current Assets Total Assets Stockholders' Equity...
accountant for Susan company made the following areas related to inventory in 20 The accountant for...
accountant for Susan company made the following areas related
to inventory in 20
The accountant for Suzanne Company made the following errors related to inventory in 2017 1. The beginning inventory for 2017 was overstated by $1,375 due to an error in the physical count. 2. A $1,650 purchase of merchandise on credit in 2017 was not recorded or included in the ending inventory Assuming a periodic inventory system, how would Sue's costs of goods sold, gross profit, and net...
Exer LO 2 Effects of inventory error Assume that the ending inventory of a merchandising firm...
Exer LO 2 Effects of inventory error Assume that the ending inventory of a merchandising firm is overstated by $20,000. Required: a. By how much and in what direction (overstated or understated) will the firm's cost of goods sold be misstated? b. If this error is not corrected, what effect will it have on the subsequent period's operating income? c. If this error is not corrected, what effect will it have on the total operating income of the two periods...
An audit revealed that in determining these amounts, the ending inventory for 2016 was overstated by...
An audit revealed that in determining these amounts, the ending
inventory for 2016 was overstated by $22,000. The inventory balance
on December 31, 2017, was accurately stated. The company uses a
periodic inventory system.
Required:
1. Restate the partial income statements to
reflect the correct amounts, after fixing the inventory error.
2-a. Compute the gross profit percentage for
each year (a) before the correction and (b) after
the correction.
2-b. Does the pattern of gross profit
percentages lend confidence to...
77) Given the following data: Ending inventory at cost $24,000 Ending inventory at current net realizable...
77) Given the following data: Ending inventory at cost $24,000 Ending inventory at current net realizable value 23,600 Cost of goods sold (before consideration of the lower-of-cost-and-net-realizable-value rule) 37,000 Which of the following depicts the proper account balance after the application of the lower-of-cost-and-net realizable value rule? A) Cost of goods sold will be $37,400. B) Cost of goods sold will be $36,400. C) Cost of goods sold will be $37,000. D) Ending inventory will be $24,000. 78) Inventory at...
TULUI 30,000 30,000 Glacier made two errors: (1) 2020 ending inventory was overstated by $5,500, and (2) 2021 ending inventory was understated by $4,000. Instructions a. Calculate the correct cost of goods sold and ending inventory for each year. b. Describe the impact of the errors on profit for 2020 and 2021 and on owner's equity at the end of 2020 and 2021. c. Explain why it is important that Glacier Fishing Gear correct these errors as soon as they...
Learning Objectives 5, 6 P6-31A Correcting inventory errors over a three-year period and computing inventory turnover and days' sales in inventory Empire State Carpets's books show the following data. In early 2020, auditors found that the ending merchandise inventory for 2017 was understated by $8,000 and that the ending merchandise inventory for 2019 was overstated by $9,000. The ending mer chandise inventory at December 31, 2018, was correct. 2. 2019, overstated $9,000 2019 2018 2017 Net Sales Revenue Cost of...
Errors in Inventory Counts The following information was taken from the records of Tinker Enterprises: Beginning inventory Cost of goods purchased Cost of goods available for sale Ending inventory Cost of goods sold 2019 2018 $60,000 $50,000 420,000 400,000 480,000 450,000 55,000 60,000 $425,000 $390,000 The following two errors were made in the physical inventory counts: 1. 2018 ending inventory was understated by $8,000. 2. 2019 ending inventory was overstated by $4,000. Compute the correct cost of goods sold for...
Help Save G. Ex A company overstated its ending inventory balance by $7000 in 2021 What impact will this error have on cost of goods sold and gross profit in 2021 and 20222 Cost of goods sold Gross profit 2022 Cost of goods sold Gross profit
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 Madison River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking o its physical inventory on December 31, 2048, Madison incorrectly counted its inventory as $444,650 instead of ti correct amount of $457,990. Enter all amounts as positive numbers. a. State the effects of the error on the December 31, 2018, balance sheet of Madison River Supply. Balance Sheet Items Understated/Overstated Amount Inventory Current Assets Total Assets Stockholders' Equity...
accountant for Susan company made the following areas related
to inventory in 20
The accountant for Suzanne Company made the following errors related to inventory in 2017 1. The beginning inventory for 2017 was overstated by $1,375 due to an error in the physical count. 2. A $1,650 purchase of merchandise on credit in 2017 was not recorded or included in the ending inventory Assuming a periodic inventory system, how would Sue's costs of goods sold, gross profit, and net...
Exer LO 2 Effects of inventory error Assume that the ending inventory of a merchandising firm is overstated by $20,000. Required: a. By how much and in what direction (overstated or understated) will the firm's cost of goods sold be misstated? b. If this error is not corrected, what effect will it have on the subsequent period's operating income? c. If this error is not corrected, what effect will it have on the total operating income of the two periods...
An audit revealed that in determining these amounts, the ending
inventory for 2016 was overstated by $22,000. The inventory balance
on December 31, 2017, was accurately stated. The company uses a
periodic inventory system.
Required:
1. Restate the partial income statements to
reflect the correct amounts, after fixing the inventory error.
2-a. Compute the gross profit percentage for
each year (a) before the correction and (b) after
the correction.
2-b. Does the pattern of gross profit
percentages lend confidence to...
Most questions answered within 3 hours.
-
Assume that the population of Mexico is 128
million and that the population increases 1.01
percentannually....
asked 3 minutes ago -
Can someone please help me add appropriate descriptive
comments to each line of code in the...
asked 9 minutes ago -
Romeo wishes to throw a bouquet of flowers to Juliet, who is on
a second-story balcony,...
asked 1 hour ago -
Why is QE a controversial monetary policy tool.
A. It may lead to excessive inflation.B. By...
asked 1 hour ago -
Principles of Programming midterm study guide help!
1.)
______ Which of the following would reference the...
asked 52 minutes ago -
A finite potential well has depth U0 = 2.78 eV . What is the
penetration distance...
asked 1 hour ago -
1. The bus bars of a power station are in two sections A and B
separated...
asked 1 hour ago -
Fiscal policy is the deliberate manipulation of taxes and
government spending to alter GDP, employment, inflation...
asked 2 hours ago -
evaluating an expression using only one digit and + and - as
operators ....3+5-1+7-5+8
-----------------------
stack...
asked 2 hours ago -
Two concentric current loops lie in the same plane. The smaller
loop has a radius of...
asked 3 hours ago -
1)Which of the following is an
important difference between qualified and nonqualified retirement
plans?
a. Qualified...
asked 3 hours ago -
What's the streaming business's problem on the
horizon?
asked 4 hours ago