At the balance sheet date, Clarkson Company held title to goods in transit amounting to $214,000. This amount was omitted from the purchases figure for the year and also from the ending inventory. What is the effect of this omission on the net income for the year as calculated when the books are closed? What is the effect on the company's financial position as shown in its balance sheet? Is materiality a factor in determining whether an adjustment for this item should be made?

Q: Alpha, Inc., made errors and/or omissions during the current year as described below. Indicate the…

A: Solution Notation to be used 0 =overstated U            = understated N            =no effect…

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A:

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A: (a) Since the Purchase terms is FOB destination and the goods is received before the date of balance…

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A:

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A: Solution: Non recording of purchase on account for year ended June 30, 2020 will result in inventory…

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