Analysis Case 9-6 (Static) Inventory errors [LO9-7] Eddie's Galleria sells billiard tables. The company has the following purchases and sales for 2024. Unit Cost Total Cost Date January 1 March 8 August 22 October 29 Transactions Beginning inventory Purchase $ 540 $ 81,000 570 Purchase Purchase 600 68,400 60,000 51,200 640 $ 260,600 Units 150 120 100 00 450 400 January 1 to December 31 Sales ($700 each) Eddie is worried about the company's financial performance. He has noticed an increase in the purchase cost of billiard tables, but at the same time, competition from other billiard table stores and other entertainment choices have prevented him from increasing the sales price. Eddie is worried that if the company's profitability is too low, stockholders will demand he be replaced. Eddie does not want to lose his job. Since 60 of the 400 billiard tables sold have not yet been picked up by the customers as of December 31, 2024, Eddie decides incorrectly to include these tables in ending inventory. He appropriately includes the sale of these 60 tables as part of total revenues in 2024 Required: 1. What amount will Eddie calculate for ending inventory and cost of goods sold using FIFO, assuming he erroneously reports that 110 tables remain in ending inventory? 2. What amount would Eddie calculate for cost of goods sold using FIFO if he correctly reports that only 50 tables remain in ending inventory? 3.& 4. What effect will the inventory error have on reported amounts for (a) ending inventory. (b) retained earnings, (c) Tost of goods sold, and (d) net income (ignoring tax effects) in 2024 and in 2025, assuming that ending inventory is correctly counted at the end of 2025?
Analysis Case 9-6 (Static) Inventory errors [LO9-7] Eddie's Galleria sells billiard tables. The company has the following purchases and sales for 2024. Unit Cost Total Cost Date January 1 March 8 August 22 October 29 Transactions Beginning inventory Purchase $ 540 $ 81,000 570 Purchase Purchase 600 68,400 60,000 51,200 640 $ 260,600 Units 150 120 100 00 450 400 January 1 to December 31 Sales ($700 each) Eddie is worried about the company's financial performance. He has noticed an increase in the purchase cost of billiard tables, but at the same time, competition from other billiard table stores and other entertainment choices have prevented him from increasing the sales price. Eddie is worried that if the company's profitability is too low, stockholders will demand he be replaced. Eddie does not want to lose his job. Since 60 of the 400 billiard tables sold have not yet been picked up by the customers as of December 31, 2024, Eddie decides incorrectly to include these tables in ending inventory. He appropriately includes the sale of these 60 tables as part of total revenues in 2024 Required: 1. What amount will Eddie calculate for ending inventory and cost of goods sold using FIFO, assuming he erroneously reports that 110 tables remain in ending inventory? 2. What amount would Eddie calculate for cost of goods sold using FIFO if he correctly reports that only 50 tables remain in ending inventory? 3.& 4. What effect will the inventory error have on reported amounts for (a) ending inventory. (b) retained earnings, (c) Tost of goods sold, and (d) net income (ignoring tax effects) in 2024 and in 2025, assuming that ending inventory is correctly counted at the end of 2025?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
please answer correctly and completely with all workings for all requirements for this question upvote if complete and correct
![Analysis Case 9-6 (Static) Inventory errors [LO9-7]
Eddie's Galleria sells billiard tables. The company has the following purchases and sales for 2024.
Transactions
Date
January 1
March 8
August 22
October 29
Beginning inventory
Purchase
Purchase
Purchase
Units
150
120
100
00
450
400
Unit Cost
$ 540
570
600
640
Total Cost
$ 81,000
68,400
60,000
51,200
$ 260,600
January 1 to December 31
Sales ($700 each)
Eddie is worried about the company's financial performance. He has noticed an increase in the purchase cost of billiard tables, but at
the same time, competition from other billiard table stores and other entertainment choices have prevented him from increasing the
sales price. Eddie is worried that if the company's profitability is too low, stockholders will demand he be replaced. Eddie does not
want to lose his job. Since 60 of the 400 billiard tables sold have not yet been picked up by the customers as of December 31, 2024,
Eddie decides incorrectly to include these tables in ending inventory. He appropriately includes the sale of these 60 tables as part of
total revenues in 2024.
O
Required:
1. What amount will Eddie calculate for ending inventory and cost of goods sold using FIFO, assuming he erroneously reports that 110
tables remain in ending inventory?
2. What amount would Eddie calculate for cost of goods sold using FIFO if he correctly reports that only 50 tables remain in ending
inventory?
3. & 4. What effect will the inventory error have on reported amounts for (a) ending inventory, (b) retained earnings, (c) Tost of goods
sold, and (d) net income (ignoring tax effects) in 2024 and in 2025, assuming that ending inventory is correctly counted at the end of
2025?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F04dd28f2-52e3-403f-b7ee-ecbe263f173e%2Fdb48a54b-d1d2-4464-8fef-43efa2292d23%2Fkqrirzh_processed.png&w=3840&q=75)
Transcribed Image Text:Analysis Case 9-6 (Static) Inventory errors [LO9-7]
Eddie's Galleria sells billiard tables. The company has the following purchases and sales for 2024.
Transactions
Date
January 1
March 8
August 22
October 29
Beginning inventory
Purchase
Purchase
Purchase
Units
150
120
100
00
450
400
Unit Cost
$ 540
570
600
640
Total Cost
$ 81,000
68,400
60,000
51,200
$ 260,600
January 1 to December 31
Sales ($700 each)
Eddie is worried about the company's financial performance. He has noticed an increase in the purchase cost of billiard tables, but at
the same time, competition from other billiard table stores and other entertainment choices have prevented him from increasing the
sales price. Eddie is worried that if the company's profitability is too low, stockholders will demand he be replaced. Eddie does not
want to lose his job. Since 60 of the 400 billiard tables sold have not yet been picked up by the customers as of December 31, 2024,
Eddie decides incorrectly to include these tables in ending inventory. He appropriately includes the sale of these 60 tables as part of
total revenues in 2024.
O
Required:
1. What amount will Eddie calculate for ending inventory and cost of goods sold using FIFO, assuming he erroneously reports that 110
tables remain in ending inventory?
2. What amount would Eddie calculate for cost of goods sold using FIFO if he correctly reports that only 50 tables remain in ending
inventory?
3. & 4. What effect will the inventory error have on reported amounts for (a) ending inventory, (b) retained earnings, (c) Tost of goods
sold, and (d) net income (ignoring tax effects) in 2024 and in 2025, assuming that ending inventory is correctly counted at the end of
2025?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education