The CFO of the Benson Microscope Corporation intentionally misclassified a downstream transportation expense in the amount of $675,000 as a product cost in an accounting period when the company made 9,000 microscopes and sold 6,500 microscopes. Benson rewards its officers with bonuses that are based on net earnings. Required a. Indicate whether the elements on the financial statements (i.e., assets, liabilities, equity, revenue, expense, and net income) would be overstated or understated as a result of the misclassification of the downstream transportation expense. Determine the amount of the overstatement or understatement for each element. Note: If there is no effect, select "Not affected" from the dropdown provided. Enter all answers as positive values. Assets Liabilities Retained earnings Revenue Expense Net income

The CFO of the Benson Microscope Corporation intentionally misclassified a downstream transportation expense in the amount of $675,000 as a product cost in an accounting period when the company made 9,000 microscopes and sold 6,500 microscopes. Benson rewards its officers with bonuses that are based on net earnings. Required a. Indicate whether the elements on the financial statements (i.e., assets, liabilities, equity, revenue, expense, and net income) would be overstated or understated as a result of the misclassification of the downstream transportation expense. Determine the amount of the overstatement or understatement for each element. Note: If there is no effect, select "Not affected" from the dropdown provided. Enter all answers as positive values. Assets Liabilities Retained earnings Revenue Expense Net income

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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