SOLVE ALL PLEASE A retailer completed a physical count of ending merchandiseinventory. When counting inventory, employees did not include$3,000 of incoming goods shipped by a supplier on December 31under FOB shipping point. These goods had been recorded inMerchandise Inventory, but they were not included in the physicalcount because they were in transit. This means shrinkage wasincorrectly overstated by $3,000.Indicate whether the failure to include in-transit inventory as part ofthe physical count results in an overstatement, understatement, orno effect on the following ratios.a. Gross margin ratiob. Profit margin ratioC. Acid-test ratiod. Current ratioರ

In the given situation, the FOB shipping point inventory was correctly recorded in purchases and…

A retailer completed a physical count of ending merchandise inventory. When counting inventory, employees did not include $3,000 of incoming goods shipped by a supplier on December 31 under FOB shipping point. These goods had been recorded in Merchandise Inventory, but they were not included in the physica. count because they were in transit. This means shrinkage was incorrectly overstated by $3,000. Indicate whether the failure to include in-transit inventory as part c the physical count results in an overstatement, understatement, on no effect on the following ratios. a. Gross margin ratio b. Profit margin ratio c. Acid-test ratio d. Current ratio

A retailer completed a physical count of ending merchandise inventory. When counting inventory, employees did not include $3,000 of incoming goods shipped by a supplier on December 31 under FOB shipping point. These goods had been recorded in Merchandise Inventory, but they were not included in the physica. count because they were in transit. This means shrinkage was incorrectly overstated by $3,000. Indicate whether the failure to include in-transit inventory as part c the physical count results in an overstatement, understatement, on no effect on the following ratios. a. Gross margin ratio b. Profit margin ratio c. Acid-test ratio d. Current ratio

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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