You own a retailer of boats, motors, and marine accessories. The store manager has just informed you that the amount of the physical inventory was incorrectly reported as $960,000 instead of the correct amount of $690,000. Unfortunately, yesterday you sent thequarterly financial statements to the stockholders. Now you must send revised statements and a letter of explanation.(a) What effect did the error have on the items of the balance sheet for the retailer? Express your answer as overstated or understated for the items affected by the error.Merchandise inventory was overstated ✓by $Therefore, Current assets, Total assets, and Total stockholders' equity were overstated✓ by $(b) What effect will the error have on the items of the income statement for the retailer?The cost of goods sold was understated by $Therefore, gross profit and net income were overstated(c) Did this error make the retailer's quarterly results look better or worse than they actually were?The inventory error made the company's quarterly results look better✔than they actually were.✓ by $

Reconciliation is a critical process for guaranteeing the quality and integrity of financial data,…

You own a retailer of boats, motors, and marine accessories. The store manager has just informed you that the amount of the physical inventor quarterly financial statements to the stockholders. Now you must send revised statements and a letter of explanation. (a) What effect did the error have on the items of the balance sheet for the retailer? Express your answer as overstated or understated for the Merchandise inventory was overstated✔ by s[ . Therefore, Current assets, Total assets, and Total stockholders' equi (b) What effect will the error have on the items of the income statement for the retailer? The cost of goods sold was understated by $[ . Therefore, gross profit and net income were overstated by (c) Did this error make the retailer's quarterly results look better or worse than they actually were? The inventory error made the company's quarterly results look better than they actually were.

You own a retailer of boats, motors, and marine accessories. The store manager has just informed you that the amount of the physical inventor quarterly financial statements to the stockholders. Now you must send revised statements and a letter of explanation. (a) What effect did the error have on the items of the balance sheet for the retailer? Express your answer as overstated or understated for the Merchandise inventory was overstated✔ by s[ . Therefore, Current assets, Total assets, and Total stockholders' equi (b) What effect will the error have on the items of the income statement for the retailer? The cost of goods sold was understated by $[ . Therefore, gross profit and net income were overstated by (c) Did this error make the retailer's quarterly results look better or worse than they actually were? The inventory error made the company's quarterly results look better than they actually were.

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

don't give answer in image format
Kindly answer the 2 questions.
A company purchased inventory for $1,400 per unit. The company later sold one unit of the inventory for cash of $2,100. Under the perpetual inventory system, which accounts will be debited to record the sale?
Accountants at UltraTech obtain their values for inventory and total assets, calculate the balance sheet percentage by dividing inventory by total assets for each year and summarize the observations for the relative size of inventory to total assets for each year and percentage change from year-to-year. This would allow them to effectively assess: a. Inventory control compared to competitorsb. If there is an effective return on assetsc. If inventory is being properly managedd. How they are managing liabilities
Explain inventory overstatement. A merchandising company has asked you to advise it on how to detect fraudulent financial reporting. Management wants your help in detecting inventory overstatement. Further, management wants to know how to find evidence of inventory overstatement. Using your own numbers, make up an example to show management the effect of overstating inventory. Show how inventory overstatement at the end of Year 1 carries through to the beginning inventory overstatement in Year 2. Prepare a brief report to management suggesting ways management could detect inventory overstatement.
Subject : Accounting You just took a new job as a controller of a large company that purchases and sells surf boards (has inventory). The owner has asked you to advise her on how she should select the correct inventory valuation method for the inventory (LIFO, FIFO and Weighted Average). What would be your response?
Consider the following transactions for Brighton Drug Store: View the transactions. Requirements 1. Journalize the purchase transactions. Explanations are not required. 2. In the final analysis, how much did the inventory cost Brighton Drug Store? ... Requirement 1. Journalize the purchase transactions. Explanations are not required. (Assume the company uses a perpetual inventory system. Round the answers to the nearest whole dollar. Record debits first, then credits. Exclude explanations from journal entries.) Jan. 2: Brighton Drug Store purchased $20,300 worth of inventory on account with credit terms of 2/15, n/45, FOB shipping point from Birch Medical Supplies. Date Jan. 2 Accounts Debit Credit Transactions Jan. 2 Jan. 3 Brighton Drug Store purchased $20,300 worth of inventory on account with credit terms of 2/15, n/45, FOB shipping point from Birch Medical Supplies. Brighton Drug Store paid a $160 freight charge. Jan. 8 Brighton Drug Store returned $6,500 of the merchandise due to…
Urgent need.
The following is a list of the accounts and their balances for Kwantlen Inspirations (a proprietorship owned by Jack Kwantlen) on March 31, 202X. The company uses a periodic inventory system. 1) prepare a multi-step format income statement 2) repare the year end adjusting entry to update the inventory and cost of goods sold accounts.
12, please read the qestion and answer b1
The accountant for the Fred Company did not record a purchase of merchandise on credit or include the items in the ending inventory. The effect of these omissions on assets, liabilities, and retained earnings would be (assume a periodic inventory system): Assets Liabilities Retained Earnings a. Understate Understate Understateb. Understate Understate No effectc. No effect Understate No effectd. Understate No effect Understate
JUST GIVE ME THE LETTER OF THE CORRECT ANSWER. NO NEED SOLUTION PLEASE ASAP