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Required Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether it would overstate (O), understate (U), or not affect (leave blank) the account. The first item for each error is recorded as an example. Complete this question by entering your answers in the tabs below. Error 1 Error 2 Error 3 Give the dollar amount of the effect and state whether a mathematical error made in determining ending inventory that understated ending inventory by $1,858 would overstate (O), understate (U), or not affect (leave blank) the account. The first item of the error is recorded as an example. (Input the amount as a positive value.) PROBLEM 5-20A

Required Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether it would overstate (O), understate (U), or not affect (leave blank) the account. The first item for each error is recorded as an example. Complete this question by entering your answers in the tabs below. Error 1 Error 2 Error 3 Give the dollar amount of the effect and state whether a mathematical error made in determining ending inventory that understated ending inventory by $1,858 would overstate (O), understate (U), or not affect (leave blank) the account. The first item of the error is recorded as an example. (Input the amount as a positive value.) PROBLEM 5-20A

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether it would overstate (O), understate (U), or not affect (leave blank) the account. The first Item for each error is recorded as an example. Complete this question by entering your answers in the tabs below. Error 1 Error 2 Give the dollar amount of the effect and state whether a mathematical error made in determining ending inventory that understated ending inventory by $1,858 would overstate (O), understate (U), or not affect (leave blank) the account. The first item of the error is recorded as an example. (Input the amount as a positive value.) PROBLEM 5-20A Error No. 3 Error 3 Sales, Year 1 Ending inventory, December 31, Year 1 Gross margin, Year 1 Beginning inventory, January 1, Year 2 Cost of goods sold, Year 1 Net income, Year 1 Retained earnings, December 31, Year 1 Total assets, December 31, Year 1 Show Transcribed Text Amount of Error <Error 2 ΝΑΙ ΝΑ FRAME SUPPLIES Income statement For the Year Ended December 31, Year 1 Problem 5-24A (Algo) Effect of inventory errors on financial statements LO 5-3 Effect The following income statement was prepared for Frame Supplies for Year 1. $ 68,700 (32,580) 36,120 (8,970) $ 27,150 Show Transcribed Text Error 3 > Sales Cost of goods sold Gross margin Operating expenses Net income During the year-end audit, the following errors were discovered: 1. A $1,323 payment for repairs was erroneously charged to the Cost of Goods Sold account. (Assume that the perpetual Inventory system is used.) 2. Sales to customers for $2,365 at December 31, Year 1, were not recorded in the books for Year 1. Also, the $1,657 cost of goods sold was not recorded. 3. A mathematical error was made in determining ending Inventory. Ending Inventory was understated by $1,858. (The Inventory account was mistakenly written down to the Cost of Goods Sold account.) Required Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether it would overstate (O), understate (U), or not affect (leave blank) the account. The first item for each error is recorded as an example.
Transcribed Image Text:Required Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether it would overstate (O), understate (U), or not affect (leave blank) the account. The first Item for each error is recorded as an example. Complete this question by entering your answers in the tabs below. Error 1 Error 2 Give the dollar amount of the effect and state whether a mathematical error made in determining ending inventory that understated ending inventory by $1,858 would overstate (O), understate (U), or not affect (leave blank) the account. The first item of the error is recorded as an example. (Input the amount as a positive value.) PROBLEM 5-20A Error No. 3 Error 3 Sales, Year 1 Ending inventory, December 31, Year 1 Gross margin, Year 1 Beginning inventory, January 1, Year 2 Cost of goods sold, Year 1 Net income, Year 1 Retained earnings, December 31, Year 1 Total assets, December 31, Year 1 Show Transcribed Text Amount of Error <Error 2 ΝΑΙ ΝΑ FRAME SUPPLIES Income statement For the Year Ended December 31, Year 1 Problem 5-24A (Algo) Effect of inventory errors on financial statements LO 5-3 Effect The following income statement was prepared for Frame Supplies for Year 1. $ 68,700 (32,580) 36,120 (8,970) $ 27,150 Show Transcribed Text Error 3 > Sales Cost of goods sold Gross margin Operating expenses Net income During the year-end audit, the following errors were discovered: 1. A $1,323 payment for repairs was erroneously charged to the Cost of Goods Sold account. (Assume that the perpetual Inventory system is used.) 2. Sales to customers for $2,365 at December 31, Year 1, were not recorded in the books for Year 1. Also, the $1,657 cost of goods sold was not recorded. 3. A mathematical error was made in determining ending Inventory. Ending Inventory was understated by $1,858. (The Inventory account was mistakenly written down to the Cost of Goods Sold account.) Required Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether it would overstate (O), understate (U), or not affect (leave blank) the account. The first item for each error is recorded as an example.
Required Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether it would overstate (O), understate (U), or not affect (leave blank) the account. The first Item for each error is recorded as an example. Complete this question by entering your answers in the tabs below. Error 1 Error 2 Give the dollar amount of the effect and state whether the payment made for repairs erroneously charged of $1,323 to the Cost of Goods Sold account would overstate (O), understate (U), or not affect (leave blank) the account. The first item of the error is recorded as an example. (Input the amount as a positive value.) Error No. 1 Sales, Year 1 Ending inventory, December 31, Year 1 Gross margin, Year 1 Beginning inventory, January 1, Year 2 Cost of goods sold, Year 1 Net income, Year 1 Retained earnings, December 31, Year 1 Total assets, December 31, Year 1 Show Transcribed Text Error 3 Error 1 Error 2 Error No. 2 Error 3 Amount of Error Required Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether it would overstate (O), understate (U), or not affect (leave blank) the account. The first item for each error is recorded as an example. Complete this question by entering your answers in the tabs below. Sales, Year 1 Ending inventory, December 31, Year 1 Gross margin, Year 1 Beginning inventory, January 1, Year 2 Cost of goods sold, Year 1 Net income, Year 1 <Error 1 Retained earnings, December 31, Year 1 Total assets, December 31, Year 1 NA NA Effect Give the dollar amount of the effect and state whether not recording sales to customers for $2,365 at December 31, Year 1 nor the cost of goods sold of $1,657 in the books would overstate (O), understate (U), or not affect (leave blank) the account. The first item of the error is recorded as an example. (Input the amount as a positive value.) Amount of Error $ 2,365 U <Error 1 S Error 2 > Effect Error 3 >
Transcribed Image Text:Required Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether it would overstate (O), understate (U), or not affect (leave blank) the account. The first Item for each error is recorded as an example. Complete this question by entering your answers in the tabs below. Error 1 Error 2 Give the dollar amount of the effect and state whether the payment made for repairs erroneously charged of $1,323 to the Cost of Goods Sold account would overstate (O), understate (U), or not affect (leave blank) the account. The first item of the error is recorded as an example. (Input the amount as a positive value.) Error No. 1 Sales, Year 1 Ending inventory, December 31, Year 1 Gross margin, Year 1 Beginning inventory, January 1, Year 2 Cost of goods sold, Year 1 Net income, Year 1 Retained earnings, December 31, Year 1 Total assets, December 31, Year 1 Show Transcribed Text Error 3 Error 1 Error 2 Error No. 2 Error 3 Amount of Error Required Determine the effect, if any, of each of the errors on the following items. Give the dollar amount of the effect and whether it would overstate (O), understate (U), or not affect (leave blank) the account. The first item for each error is recorded as an example. Complete this question by entering your answers in the tabs below. Sales, Year 1 Ending inventory, December 31, Year 1 Gross margin, Year 1 Beginning inventory, January 1, Year 2 Cost of goods sold, Year 1 Net income, Year 1 <Error 1 Retained earnings, December 31, Year 1 Total assets, December 31, Year 1 NA NA Effect Give the dollar amount of the effect and state whether not recording sales to customers for $2,365 at December 31, Year 1 nor the cost of goods sold of $1,657 in the books would overstate (O), understate (U), or not affect (leave blank) the account. The first item of the error is recorded as an example. (Input the amount as a positive value.) Amount of Error $ 2,365 U <Error 1 S Error 2 > Effect Error 3 >
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