what is a correcting entry for $150,000 of overstated inventory
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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what is a correcting entry for $150,000 of overstated inventory
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Step 1
The overstatement of the inventory would mean that the inventory (assumed ending inventory) is stated more at the end of the year. It would understate the cost of goods sold and also would overstate the income of the firm. Hence, the cost of goods sold is to be increased to correct the error.
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