Scenario 1:Rocky Inc hired a new intern from CSU to help with year-end inventory. The interncomputed the inventory counts at the end of 2020 and 2021. However, the intern's manager,a UNC grad, noticed that the ending inventory did not include inventory on consignment to aretail customer of $3,000 at the end of year 2020 and $6,000 at the end of year 2021. Whatwas the effect of the error (if any] on 2021's statements (amount and whether it was under- (too low) or over-stated (too high)? If there is no effect, put OK

The objective of the question is to determine the effect of an error in inventory calculation on the…

Answered: Scenario 1:Rocky Inc hired a new intern…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Please give me correct solution
answer step by step
A new accountant prepared the following general journal entry on March 31, 2024, for Rock Castle Construction. The general journal entry includes an error. Choose the best explanation of the error from the choices provided. DR: 12000 Inventory $5,575 CR: 10100 Checking $5,575 Purchase of inventory Please add checkmark next to the correct answer(s). 1 Inventory should have been credited, not debited. 2 The account # for inventory is incorrect; should be 12100. 3 The checking account should have been debited, not credited. 4 The Inventory account should never be adjusted by a general journal entry. 5 None of the above
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Lime Supplies had a miscount of inventory at $22,000 for the year end May 31, 2022. The correct amount should have been $25,000. If this error was never corrected, and assuming the inventory count was correct for 2023, how much would this error impact the cost of goods sold in 2022? Select one: a. Not impacted at all. b. $3,000 overstated c. $ 47,000 understated d. $3,000 understated
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
1. A business may need to estimate its amount of inventory because perpetual inventory records are not maintained. a disaster has destroyed the inventory records and the inventory. monthly or quarterly financial statements are needed, but a physical inventory is taken only once a year. All of these choices are correct. 2. When using the retail method of inventory costing, the ending inventory cost is estimated by multiplying the ending inventory at retail by the cost to retail ratio. multiplying the ending inventory at cost by the cost to retail ratio. deducting the estimated cost of goods sold from the merchandise available for sale. deducting the estimated gross profit from the sales.
Assume that because of a clerical error, the ending inventory is reported to be 1,070 units rather than the actual number of units (1,170) on hand. 5a. If FIFO is used, calculate the amount of the understatement or overstatement in the cost of sales for the first six months of the current year. Overstatement of cost of sales 5b. If FIFO is used, calculate the amount of the understatement or overstatement in the current assets at June 30 of the current year. Understatement of current assets
Ocak Uçan Yağlar Sanayi A.Ş. He bought 6 automatic filling machines and paid a total of 600,000 liras for them. The depreciation life of filling machines is 5 years. In this situation a) If the ordinary depreciation method is applied, what is the depreciation amount to be allocated according to the years? 4. What will be the book value at the end of the year? b) If the rapid depreciation method is applied, what is the depreciation amount to be allocated over the years? 4. What will be the book value at the end of the year?
In your audit of James Smith Company, you find that a physical inventory on December 31, 2020, showed merchandise with a cost of $449,390 was on hand at that date. You also discover the following items were all excluded from the $449,390. 1. 2. 3. 4. 5. Merchandise of $61,150 which is held by Smith on consignment. The consignor is the Max Suzuki Company. Merchandise costing $36,420 which was shipped by Smith f.o.b. destination to a customer on December 31, 2020. The customer was expected to receive the merchandise on January 6, 2021. Merchandise costing $47,720 which was shipped by Smith f.o.b. shipping point to a customer on December 29, 2020. The customer was scheduled to receive the merchandise on January 2, 2021. Merchandise costing $83,030 shipped by a vendor f.o.b. destination on December 30, 2020, and received by Smith on January 4, 2021. Merchandise costing $49,200 shipped by a vendor f.o.b. shipping point on December 31, 2020, and received by Smith on January 5, 2021. Based on…
SHOW COMPUTATIONyou found the following information relating to certain inventory transactions from your observation of the client’s physical count and review of sales and purchases cutoff: a. Goods costing P180,000 were received from a vendor on January 3, 2021. The goods were not included in the physical count. The related invoice was received and recorded on December 30, 2020. The goods were shipped on December 31, 2020, terms FOB shipping point.b. Goods costing P200,000, sold for P300,000, were shipped on December 31, 2020, and were received by the customer on January 2, 2021. The terms of the invoice were FOB shipping point. The goods were included in the ending inventory for 2020 and the sale was recorded in 2021.c. The invoice for goods costing P150,000 was received and recorded as a purchase on December 31, 2020. The related goods shipped FOB destination were received on January 2, 2021 but were included in the physical inventory as goods in transit.d. A P600,000 shipment of…
Q: Which misstatement below is more difficult to detect? Explain.(i)The inventory costing $ 150,000 being ordered by customers before the year end was excluded from the ending inventory balance as they are set aside for delivery after year end. The ending balance of inventory as on the statement of financial position was $ 600,000.(ii) Inventory list shows 40 boxes of rice but only 38 boxes were found in the warehouse.(iii) The inventory has a cost of $600,000 and realizable value of $540,000 as the items are outdated. The ending balance of inventory as on the statement of financial position was $ 600,000.

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS