On December 31, 2021, ABC Company sold merchandise for P 675,000 to BBB Company. The terms of the sale were net 30, FOB shipping point. The merchandise was shipped on December 31, 2021, and arrived at BBB on January 5, 2022. Due to a clerical error, the sale was not recorded until January 2022 and the merchandise sold at a 35% markup on cost was included in inventory on December 31, 2021. If left unattended, what was the
On December 31, 2021, ABC Company sold merchandise for P 675,000 to BBB Company. The terms of the sale were net 30, FOB shipping point. The merchandise was shipped on December 31, 2021, and arrived at BBB on January 5, 2022. Due to a clerical error, the sale was not recorded until January 2022 and the merchandise sold at a 35% markup on cost was included in inventory on December 31, 2021. If left unattended, what was the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 31, 2021, ABC Company sold merchandise for P 675,000 to BBB Company. The terms of the sale were net 30, FOB shipping point. The merchandise was shipped on December 31, 2021, and arrived at BBB on January 5, 2022.
Due to a clerical error, the sale was not recorded until January 2022 and the merchandise sold at a 35% markup on cost was included in inventory on December 31, 2021.
If left unattended, what was the effect of the error on cost of goods sold for 2022?
Group of answer choices
Overstated by 175,000
None of the choices
Overstated by 675,000
Overstated by 500,000
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