During 2011, Paul discovered that the ending inventories reported on its financial statements were incorrect by the following amounts: 2009 P60,000 understated; 2010 P75,000 overstated. Paul uses the periodic inventory system to ascertain year-end quantities that are converted to peso amounts using the FIFO cost method. Prior to any adjustments for these errors and ignoring income tax, Paul’s retained earnings at January 1, 2011 would be
During 2011, Paul discovered that the ending inventories reported on its financial statements were incorrect by the following amounts: 2009 P60,000 understated; 2010 P75,000 overstated. Paul uses the periodic inventory system to ascertain year-end quantities that are converted to peso amounts using the FIFO cost method. Prior to any adjustments for these errors and ignoring income tax, Paul’s retained earnings at January 1, 2011 would be
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During 2011, Paul discovered that the ending inventories reported on its financial statements were incorrect by the following amounts: 2009 P60,000 understated; 2010 P75,000 overstated. Paul uses the periodic inventory system to ascertain year-end quantities that are converted to peso amounts using the FIFO cost method. Prior to any adjustments for these errors and ignoring income tax, Paul’s retained earnings at January 1, 2011 would be
Choices;
Correct
15,000 overstated
75,000 overstated
135,000 overstated
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