Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2018 and 2017 contained errors as follows: 2018 2017 Ending inventory $9,000 overstated $24,000 overstated Depreciation expense $6,000 understated $18,000 overstated Reference: Ref 8-5 Assume that no correcting entries were made at December 31, 2017, or December 31, 2018 and that no additional errors occurred in 2019. Ignoring income taxes, by how much will working capital at December 31, 2019 be overstated or understated? A. $0 B. $15,000 understated C. $ 6,000 overstated D. $ 6,000 understated
Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2018 and 2017 contained errors as follows: 2018 2017 Ending inventory $9,000 overstated $24,000 overstated Depreciation expense $6,000 understated $18,000 overstated Reference: Ref 8-5 Assume that no correcting entries were made at December 31, 2017, or December 31, 2018 and that no additional errors occurred in 2019. Ignoring income taxes, by how much will working capital at December 31, 2019 be overstated or understated? A. $0 B. $15,000 understated C. $ 6,000 overstated D. $ 6,000 understated
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2018 and 2017 contained errors as follows:
Assume that no correcting entries were made at December 31, 2017, or December 31, 2018 and that no additional errors occurred in 2019. Ignoring income taxes, by how much willworking capital at December 31, 2019 be overstated or understated?
|
|
2018
|
|
2017
|
|
Ending inventory
|
$9,000 overstated
|
|
$24,000 overstated
|
|
|
$6,000 understated
|
|
$18,000 overstated
|
Reference: Ref 8-5
Assume that no correcting entries were made at December 31, 2017, or December 31, 2018 and that no additional errors occurred in 2019. Ignoring income taxes, by how much will
| A. |
$0
|
|
| B. |
$15,000 understated
|
|
| C. |
$ 6,000 overstated
|
|
| D. |
$ 6,000 understated
|
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