answer question 3 and 4 please thank you You are examining the financial statements of France Company for the year endedDecember 31, 2022. It uses the physical inventory system of accounting forinventory. During your examination, you discovered that the 2023 sales of P120,000 were recorded in 2022; goods were excluded in the 2022 ending inventoryat a cost of 70,000.Based on the foregoing, answer the following questions:Question 1: Which of the following accounts is(are) overstated by P 120,000 at theend of year 2022 as a result of the error? |[ Select ]Question 2: Which of the following accounts is(are) understated by P 70,000 at theend of year 2022 as a result of the error? [ Select ]Question 3: Which of the following accounts is(are) overstated by P 50,000 at theend of year 2022 as a result of the error? [ Select ]V [ Select ]Question 4: What would be the adjusting eror isdiscovered in year 2023? [ Select]SalesInventory, December 31, 2022Question 5: What would be the adjusting eror isRetained Earningsdiscovered in year 2023? [Select ]Sales and Accounts Receivable You are examining the financial statements of France Company for the year endedDecember 31, 2022. It uses the physical inventory system of accounting forinventory. During your examination, you discovered that the 2023 sales of P120,000 were recorded in 2022; goods were excluded in the 2022 ending inventoryat a cost of 70,000.Based on the foregoing, answer the following questions:Question 1: Which of the following accounts is(are) overstated by P 120,000 at theend of year 2022 as a result of the error? [ Select ]Question 2: Which of the following accounts is(are) understated by P 70,000 at theend of year 2022 as a result of the error? [Select ]Question 3: Which of the following accounts is(are) overstated by P 50,000 at theend of year 2022 as a result of the error? [ Select ]Question 4: What would be the adjusting entry to adjust the inventory if the error isdiscovered in year 2023? I Select ]V [ Select ]Question 5: What would trevenue if the error isDebit - Retained Earnings, P70,000; Credit - Cost of Sales,P 70,000discovered in year 2023?Debit - Inventory, January 1,2023, P 70,000; Credit -Retained Earnings, P 70,000« PreviousDebit Retained Earnings, P70,000; Credit Inventory,January 1, 2023, P 70,000NextDebit - Inventory, December31, 2022, P 70,000; Credit -Retained Earnings, P 70,000Submit C

Understatement of ending inventory results in a higher cost of goods sold. The net effect of the…

Answered: 22. It uses the physical inventory…

22. It uses the physical inventory system of accounting for your examination, you discovered that the 2023 sales of P orded in 2022; goods were excluded in the 2022 ending in O.

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Accounting For Merchandising Businesses

Section: Chapter Questions

Problem 36E: The following data were extracted from the accounting records of Harkins Company for the year ended...

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You are examining the financial statements of France Company for the year ended December 31, 2022. It uses the physical inventory system of accounting for inventory. During your examination, you discovered that the 2023 sales of P 120,000 were recorded in 2022; goods were excluded in the 2022 ending inventory at a cost of 70,000. Based on the foregoing, answer the following questions: Question 1: Which of the following accounts is(are) overstated by P 120,000 at the end of year 2022 as a result of the error? Select 1 sales Onlv a. Sales and Accounts Receivable b. Inventory, December 31, 2022 only c. Retained Earnings only Question 2: Which of the following accounts is (are) understated by p 70,000 at the end of year 2022 as a result of the error? Select 1 a. retained earnings b. inventory, december 31,2022 c. sales and accounts receivable d. sales and retained earnings
Required: Answer the following independent questions and show all computations supporting your answers. a) Assume that the company uses the FIFO method. The value of the ending inventory atDecember 31 is $__________. b) Assume that the company uses the LIFO method. The value of the ending inventory onDecember 31 is $__________.c) Determine the difference in the amount of income that the company would have reported if ithad used the FIFO method instead of the LIFO method. Would income have been greater orless? Which method would provide more tax advantage? -Explain your rationale.