Berry Corporation miscounted the ending inventory at December 31, 2010. The balance sheet reported inventory of $360,000, but $25,000 worth of items were omitted from that amount. Berry reported net income of $742,640 for the year. What effect did this inventory error have on Berry’s cost of goods sold for the year? What is the correct net income for the year ended December 31, 2010?

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Answer 1

Textbook Question

Chapter 5A, Problem 1YT

Berry Corporation miscounted the ending inventory at December 31, 2010. The balance sheet reported inventory of $360,000, but $25,000 worth of items were omitted from that amount. Berry reported net income of $742,640 for the year. What effect did this inventory error have on Berry’s cost of goods sold for the year? What is the correct net income for the year ended December 31, 2010?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

To determine

Identify the impact of the given inventory errors on the cost of goods sold and compute the correct net income.

Explanation of Solution

The cost of goods sold would be overstated as the ending inventory is understated. The amount worth $25,000 was omitted while calculating the cost of goods sold, hence the net income would have been understated by $25,000. Therefore, the correct net income for the year end would be $767,640.

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Answer 2

Textbook Question

Chapter 5A, Problem 1YT

Berry Corporation miscounted the ending inventory at December 31, 2010. The balance sheet reported inventory of $360,000, but $25,000 worth of items were omitted from that amount. Berry reported net income of $742,640 for the year. What effect did this inventory error have on Berry’s cost of goods sold for the year? What is the correct net income for the year ended December 31, 2010?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

To determine

Identify the impact of the given inventory errors on the cost of goods sold and compute the correct net income.

Explanation of Solution

The cost of goods sold would be overstated as the ending inventory is understated. The amount worth $25,000 was omitted while calculating the cost of goods sold, hence the net income would have been understated by $25,000. Therefore, the correct net income for the year end would be $767,640.

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Answer 3

Textbook Question

Chapter 5A, Problem 1YT

Berry Corporation miscounted the ending inventory at December 31, 2010. The balance sheet reported inventory of $360,000, but $25,000 worth of items were omitted from that amount. Berry reported net income of $742,640 for the year. What effect did this inventory error have on Berry’s cost of goods sold for the year? What is the correct net income for the year ended December 31, 2010?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

To determine

Identify the impact of the given inventory errors on the cost of goods sold and compute the correct net income.

Explanation of Solution

The cost of goods sold would be overstated as the ending inventory is understated. The amount worth $25,000 was omitted while calculating the cost of goods sold, hence the net income would have been understated by $25,000. Therefore, the correct net income for the year end would be $767,640.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 5A, Problem 1YT

Berry Corporation miscounted the ending inventory at December 31, 2010. The balance sheet reported inventory of $360,000, but $25,000 worth of items were omitted from that amount. Berry reported net income of $742,640 for the year. What effect did this inventory error have on Berry’s cost of goods sold for the year? What is the correct net income for the year ended December 31, 2010?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

To determine

Identify the impact of the given inventory errors on the cost of goods sold and compute the correct net income.

Explanation of Solution

The cost of goods sold would be overstated as the ending inventory is understated. The amount worth $25,000 was omitted while calculating the cost of goods sold, hence the net income would have been understated by $25,000. Therefore, the correct net income for the year end would be $767,640.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Identify the impact of the given inventory errors on the cost of goods sold and compute the correct net income.

Explanation of Solution

The cost of goods sold would be overstated as the ending inventory is understated. The amount worth $25,000 was omitted while calculating the cost of goods sold, hence the net income would have been understated by $25,000. Therefore, the correct net income for the year end would be $767,640.

Answer 8

Expert Solution & Answer

To determine

Identify the impact of the given inventory errors on the cost of goods sold and compute the correct net income.

Explanation of Solution

The cost of goods sold would be overstated as the ending inventory is understated. The amount worth $25,000 was omitted while calculating the cost of goods sold, hence the net income would have been understated by $25,000. Therefore, the correct net income for the year end would be $767,640.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Identify the impact of the given inventory errors on the cost of goods sold and compute the correct net income.

Answer 12

Explanation of Solution

The cost of goods sold would be overstated as the ending inventory is understated. The amount worth $25,000 was omitted while calculating the cost of goods sold, hence the net income would have been understated by $25,000. Therefore, the correct net income for the year end would be $767,640.

Answer 13

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