Inventory Errors Assume that in year 1, the ending merchandise inventory is overstated by $50,000. If this is the only error in years 1 and 2, indicate which items will be understated, overstated, or correctly stated for years 1 and 2.   Year 1 Year 2 Ending merchandise inventory     Beginning merchandise inventory     Cost of goods sold     Gross profit     Net income     Ending owner's capital

Cornerstones of Financial Accounting
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ISBN:9781337690881
Author:Jay Rich, Jeff Jones
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Chapter6: Cost Of Goods Sold And Inventory
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Problem 28CE: Inventory Errors McLelland Inc. reported net income of $175,000 for 2019 and $210,000 for 2020....
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Inventory Errors

Assume that in year 1, the ending merchandise inventory is overstated by $50,000. If this is the only error in years 1 and 2, indicate which items will be understated, overstated, or correctly stated for years 1 and 2.

  Year 1 Year 2
Ending merchandise inventory
 
 
Beginning merchandise inventory
 
 
Cost of goods sold
 
 
Gross profit
 
 
Net income
 
 
Ending owner's capital
 
 
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