do not give solution in image Ayayai Hardware Limited reported the following amounts for its cost of goods sold and Inventory:Cost of goods soldEnding inventory(a)Ayayai made two errors in 2023. It recorded a $4,100 inventory purchase in transit at the end of 2023 that was shipped FOBdestination and included this amount in ending inventory. Also during the year-end inventory count, staff forgot to count $5,000 ofending inventory that was on hand. No one discovered these errors in 2023.-2024Your Answer Correct Answer$169,20037,400Ending inventoryYour answer is partially correct.Cost of goods soldCalculate the correct ending inventory and cost of goods sold amounts for each year.2023$152,90029,400+AOF202437,400168,300$$202330300147,900 Ignoring the effect of income taxes, describe the impact of the errors on (1) cost of goods sold, (2) income before income tax, (3)assets, (4) liabilities, and (5) total shareholders' equity for each of the two years.(1)Cost ofgoods soldIncome(2) beforeincome tax(3) Assets(4) LiabilitiesTotal(5) shareholders'equity>2024VALAGALATOO<>2023$$$$

The two items, ending inventory and the cost of goods sold have a correlation as both of these are…

Ayayai Hardware Limited reported the following amounts for its cost of goods sold and Inventory: Cost of goods sold Ending inventory (a) 2024 $169,200 37,400 Ayayai made two errors in 2023. It recorded a $4,100 inventory purchase in transit at the end of 2023 that was shipped FOB destination and included this amount in ending inventory. Also during the year-end inventory count, staff forgot to count $5,000 of ending inventory that was on hand. No one discovered these errors in 2023. Your Answer Correct Answer 2023 $152,900 29,400 Your answer is partially correct. Ending inventory Calculate the correct ending inventory and cost of goods sold amounts for each year. Cost of goods sold $ 2024 37,400 168,300 2023 30300 147,900

Ayayai Hardware Limited reported the following amounts for its cost of goods sold and Inventory: Cost of goods sold Ending inventory (a) 2024 $169,200 37,400 Ayayai made two errors in 2023. It recorded a $4,100 inventory purchase in transit at the end of 2023 that was shipped FOB destination and included this amount in ending inventory. Also during the year-end inventory count, staff forgot to count $5,000 of ending inventory that was on hand. No one discovered these errors in 2023. Your Answer Correct Answer 2023 $152,900 29,400 Your answer is partially correct. Ending inventory Calculate the correct ending inventory and cost of goods sold amounts for each year. Cost of goods sold $ 2024 37,400 168,300 2023 30300 147,900

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 13PA: Company Elmira reported the following cost of goods sold but later realized that an error had been...

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Company Edgar reported the following cost of goods sold but later realized that an error had been made in ending inventory for year 2021. The correct inventory amount for 2021 was 12,000. Once the error is corrected, (a) how much is the restated cost of goods sold for 2021? and (b) how much is the restated cost of goods sold for 2022?
Tanke Company reported net income on the year-end financial statements of $850,200. However, errors in inventory were discovered after the reports were issued. If inventory was overstated by $21,000, how much net income did the company actually earn?
If Wakowski Companys ending inventory was actually $86,000 but was adjusted at year end to a balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?
Shetland Company reported net income on the year-end financial statements of $125,000. However, errors in inventory were discovered after the reports were issued. If inventory was understated by $15,000, how much net income did the company actually earn?
If Barcelona Companys ending inventory was actually $122,000, but the cost of consigned goods, with a cost value of $20,000 were accidentally included with the company assets, when making the year-end inventory adjustment, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?
Errors As controller of Lerner Company, which uses a periodic inventory system, you discover the following errors in the current year: 1. Merchandise with a cost of 17,500 was properly included in the final inventory, but the purchase was not recorded until the following year. 2. Merchandise purchases are in transit under terms of FOB shipping point. They have been excluded from the inventory, but the purchase was recorded in the current year on the receipt of the invoice of 4,300. 3. Goods out on consignment have been excluded from inventory. 4. Merchandise purchases under terms FOB shipping point have been omitted from the purchases account and the ending inventory. The purchases were recorded in the following year. 5. Goods held on consignment from Talbert Supply Co. were included in the inventory. Required: For each error, indicate the effect on the ending inventory and the net income for the current year and on the net income for the following year.
At the end of 2019, Manny Company recorded its ending inventory at 350,000 based on a physical count. During 2020, the company discovered that the correct inventory value at the end of 2019 should have been 400,000 because it made a counting error. Upon discovery of this error in 2020, what correcting journal entry will Manny make? Ignore income taxes.
Refer to the information in E22-13. Required: Prepare the correcting journal entries if the company discovers each error 2 years after it is made and it has closed the books for the second year. Ignore income taxes. E22-13: The following are independent errors made by a company that uses the periodic inventory system: a. Goods in transit, purchased on credit and shipped FOB destination, 10,000, were included in purchases but not in the physical count of ending inventory. b. Purchase of a machine for 2,000 was expensed. The machine has a 4-vear life, no residual value, and straight-line depreciation is used. c. Wages payable of 2,000 were not accrued. d. Payment of next years rent, 4,000, was recorded as rent expense. e. Allowance for doubtful accounts of 5,000 was not recorded. The company normally uses the aging method. f. Equipment with a book value of 70,000 and a fair value of 100,000 was sold at the beginning of the year. A 2-year, non-interest-bearing note for 129,960 was received and recorded at its face value, and a gain of 59,960 was recognized. No interest revenue was recorded and 14% is a fair rate of interest.
Effects of an Inventory Error The income statements for Graul Corporation for the 3 years ending in 2019 appear below. During 2019, Graul discovered that the 2017 ending inventory had been misstated due to the following two transactions being recorded incorrectly. a. A purchase return of inventory costing $42,000 was recorded twice. b. A credit purchase of inventory' made on December 20 for $28,500 was not recorded. The goods were shipped F.O.B. shipping point and were shipped on December 22, 2017. Required: 1. Was ending inventory for 2017 overstated or understated? By how much? 2. Prepare correct income statements for all 3 years. 3. CONCEPTUAL CONNECTION Did the error in 2017 affect cumulative net income for the 3-year period? Explain your response. 4. CONCEPTUAL CONNECTION Why was the 2019 net income unaffected?
If a group of inventory items costing $15,000 had been omitted from the year-end inventory count, what impact would the error have on the following inventory calculations? Indicate the effect (and amount) as either (a) none, (b) understated $______, or (c) overstated $______. Table 10.1
The following are independent errors made by a company that uses the periodic inventory system: a. Goods in transit, purchased on credit and shipped FOB destination, 10,000, were included in purchases but not in the physical count of ending inventory. b. Purchase of a machine for 2,000 was expensed. The machine has a 4-year life, no residual value, and straight-line depreciation is used. c. Wages payable of 2,000 were not accrued. d. Payment of next years rent, 4,000, was recorded as rent expense. e. Allowance for doubtful accounts of 5,000 was not recorded. The company normally uses the aging method. f. Equipment with a book value of 70,000 and a fair value of 100,000 was sold at the beginning of the year. A 2-year, non-interest-bearing note for 129,960 was received and recorded at its face value, and a gain of 59,960 was recognized. No interest revenue was recorded and 14% is a fair rate of interest. Required: 1. Next Level Indicate the effect of each of the preceding errors on the companys assets, liabilities, shareholders equity, and net income in the year in which the error occurs. State whether the error causes an overstatement (+), an understatement (), or no effect (NE). 2. Prepare the correcting journal entry or entries required at the beginning of the year for each of the preceding errors, assuming the company discovers the error in the year after it was made. Ignore income taxes.
Borys Companys periodic inventory at December 31, 2019, is understated by 10,000, but purchases are correct. Johnson correctly values its 2020 ending inventory. What is the effect of this error on Boryss 2019 and 2020 financial statements?