income tax?Taking InventoryAt the end of the last fiscal period, employees for Trans-Canada Distributorscounted all merchandise on hand. However, a complete section of the warehousewas missed when the inventory was taken. The cost of the merchandise that wasnot included in the ending inventory figure was $7500.Questions1. What effect has this error on the income statement and on the balancesheet this year?2. If the error went undiscovered, would the net income in the secondyear be too high or too low?3. Over the two-year period, what is the total error in the net income(assuming the second year's inventory is done correctly)?4. Is the owner's equity total correct or incorrect in the second-yearbalance sheet? Explain your answer.©P

Physical stock taking is done at the end of every accounting year. Under this process, each and…

Taking Iventory At the end of the last fiscal period, er counted all merchandise on hand. How was missed when the inventory was tak not included in the ending inventory fi Questions 1. What effect has this error on the in sheet this year? 2. If the error went undiscovered, wc year be too high or too low? 3. Over the two-year period, what is (assuming the second year's inven 4. Is the owner's equity total correct balance sheet? Explain your answ

Taking Iventory At the end of the last fiscal period, er counted all merchandise on hand. How was missed when the inventory was tak not included in the ending inventory fi Questions 1. What effect has this error on the in sheet this year? 2. If the error went undiscovered, wc year be too high or too low? 3. Over the two-year period, what is (assuming the second year's inven 4. Is the owner's equity total correct balance sheet? Explain your answ

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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If the ending inventory is overstated in the current year: Net income will be understated in the current year. Next year's beginning inventory will also be overstated. Next year's net income will be overstated. Next year's beginning inventory will be understated.
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A company reports the following: Cost of merchandise sold $1,460,000 Average merchandise inventory 182,500 Determine (a) the inventory turnover and (b) the number of days sales in inventory. Assume a 365-day year. Round your answers to one decimal place. a. Inventory turnover b. Number of days' sales in inventory days Previous Next 1:00 PM 18 se g 12/11/2020 a