Dank Ltd reported cost of goods sold as follows: 2021 2022 Beginning inventory $ 64,000 $ 54,000 Cost of goods purchased 874,000 871,000 Cost of goods available for sale 938,000 925,000 Ending inventory 54,000 65,000 Cost of goods sold $884,000 $860,000 Miller made two errors: (1) 2021 ending inventory was overstated by $8,000. (2) 2022 ending inventory was overstated by $4,000. Required: Assuming the errors had not been corrected, indicate the dollar effect that the errors had on the items appearing on the financial statements listed below. Also indicate if the amounts are overstated (O) or understated (U). 2021 2022 Overstated/ Overstated/ Amount Understated Amount Understated Total assets $_________ _______ $_________ _______ Shareholders' equity $_________ _______ $_________ _______ Cost of goods sold $_________ _______ $_________ _______ Net earnings $_________ _______ $_________ _______
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Dank Ltd reported cost of goods sold as follows:
Miller made two errors:
Required: Assuming the errors had not been corrected, indicate the dollar effect that the errors had on the items appearing on the financial statements listed below. Also indicate if the amounts are overstated (O) or understated (U).
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