4. If a company understated its ending inventory balance for 2022 by $5,000, and overstates its ending inventory balance for 2023 by $8,000, what are the effects on its net income for 2023? A. Overstated by $3,000 B. Understated by $3,000 C. Overstated by $13,000 D. Understated by $13,000 E. Understated by $8,000

4. If a company understated its ending inventory balance for 2022 by $5,000, and overstates its ending inventory balance for 2023 by $8,000, what are the effects on its net income for 2023? A. Overstated by $3,000 B. Understated by $3,000 C. Overstated by $13,000 D. Understated by $13,000 E. Understated by $8,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ending inventory for the year ended December 31, 2017, is understated by $15,000. How will this error affect net income for 2018? Net income will be understated by $30,000. Net income will be understated by $15,000. O Net income will be overstated by $15,000. O Net income will be overstated by $30,000. O The understatement of inventory in 2017 will not affect income in 2018.
Suppose this information is available for PepsiCo, Inc. for 2020, 2021, and 2022. (in millions) Beginning inventory Ending inventory Cost of goods sold Sales revenue (a) 2020 Inventory turnover $1,700 2,200 15,015 38,600 2021 $2,200 $2,500 2,500 2022 45,100 2020 17,860 17,595 2,600 Calculate the inventory turnover for 2020, 2021, and 2022. (Round inventory turnover to 1 decimal place, e.g. 5.1.) 45,000 times 2021 times 2022 times
pp. Subject Accounting
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(b) Your answer is correct. Calculate the days in inventory for 2020, 2021, and 2022. (Round answers to 1 decimal places, e.g. 15.2.) (c) 2020 86.9 days eTextbook and Media 2021 121.7 days 2022 125.9 days Attempts: unlimited Calculate the gross profit rate for 2020, 2021, and 2022. (Round answers to 1 decimal places, e.g. 15.2%.) Gross profit rate eTextbook and Media Save for Later 2020 % 2021 % 2022 Attempts: unlimited Submit Answer
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