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The effect of correcting this error is:

The effect of correcting this error is:

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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Bantam Ltd made a gross profit of E134,000 based on Opening inventory £354.000 Purchases E712,400 B Sales Closing inventory £300.000 Expenses were £120.000 giving a net profit of E14,000. A recount of the inventory disclosed that it should have been reported as E380,000 not £300,000. The effect of correcting this error is: (A) Gross profit and net profit increase by E80,000 Gross profit and net profit remain unchanged Gross profit decreases by EBO,000 and net profit remains unchanged Gross profit increases by EBD,000 and net profit remains unchanged £900,000
Transcribed Image Text:Bantam Ltd made a gross profit of E134,000 based on Opening inventory £354.000 Purchases E712,400 B Sales Closing inventory £300.000 Expenses were £120.000 giving a net profit of E14,000. A recount of the inventory disclosed that it should have been reported as E380,000 not £300,000. The effect of correcting this error is: (A) Gross profit and net profit increase by E80,000 Gross profit and net profit remain unchanged Gross profit decreases by EBO,000 and net profit remains unchanged Gross profit increases by EBD,000 and net profit remains unchanged £900,000
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