Malcolm Lee Industries reported the following amounts in its December 31st financial statements:     2020   2021 Cost of Goods sold   $272,000   $288,400 Ending Inventory   55,200   55,200 Errors were made in each year as follows: in 2020, ending inventory was overstated by $10,000 while in 2021, ending inventory was understated by $6,900. Explain the impact of these errors for 2021 profit and owners’ equity. Profits will be                                                             by $  .   Owners’ equity will be                                                             by $  .

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Malcolm Lee Industries reported the following amounts in its December 31st financial statements:

    2020   2021
Cost of Goods sold   $272,000   $288,400
Ending Inventory   55,200   55,200


Errors were made in each year as follows: in 2020, ending inventory was overstated by $10,000 while in 2021, ending inventory was understated by $6,900. Explain the impact of these errors for 2021 profit and owners’ equity.

Profits will be                                                             by $  .  
Owners’ equity will be                                                             by $  .
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