Chapter 6, Problem 16Q

(a)

To determine

Inventory error:

Inventory errors are sometimes caused by making mistake, in physical count, in pricing the inventory correctly, or in recognizing the transfer of title for the goods in transit. These inventory errors affect both the income statement as well as the balance sheet.

To Explain: The effect of the inventory error on 2018 net income of K Company.

(b)

To determine

Inventory error:

Inventory errors are sometimes caused by making mistake, in physical count, in pricing the inventory correctly, or in recognizing the transfer of title for the goods in transit. These inventory errors affect both the income statement as well as the balance sheet.

To Explain: The effect of the inventory error on 2019 net income of K Company.

(c)

To determine

Inventory error:

Inventory errors are sometimes caused by making mistake, in physical count, in pricing the inventory correctly, or in recognizing the transfer of title for the goods in transit. These inventory errors affect both the income statement as well as the balance sheet.

To Explain: The effect of the inventory error on the combined net income of K Company for the 2 years.