Shockley Co. reported the following amounts in its financial statements: (a) Cost of goods sold (b) Profit (c) Total current assets (d) Equity In making the physical counts of inventory, the following errors were made: • Inventory on December 31, 2020: understated $80,000 • Inventory on December 31, 2021: overstated $22,000 Required: For each of the preceding financial statement items-(a), (b), (c), and (d)-prepare a schedule similar to the following and show the adjustments that would have been necessary to correct the reported amounts. (Negative answers should be indicated by a min sign.) a. Cost of goods sold: Reported Adjustments: Dec. 31, 2020 error Dec. 31, 2021 error Corrected b. Profit: Reported Adiustments: Dec. 31. 2020 error $ $ Financial Statements for Year Ended December 31. 2022 2020 2021 $ 765,000 $ 897,000 $ 820,000 270,000 325,000 281,000 1,255,000 1,365,000 1,200,000 1,387,000 1,530,000 1,332,000 $ 2020 765,000 $ (80,000) 2021 270,000 $ 80.000 685,000 $ 999,000 $ 897,000 $ 820,000 80,000 22,000 2022 325,000 $ (80.000) (22,000) 798,000 281,000 Numbers

Shockley Co. reported the following amounts in its financial statements: (a) Cost of goods sold (b) Profit (c) Total current assets (d) Equity In making the physical counts of inventory, the following errors were made: • Inventory on December 31, 2020: understated $80,000 • Inventory on December 31, 2021: overstated $22,000 Required: For each of the preceding financial statement items-(a), (b), (c), and (d)-prepare a schedule similar to the following and show the adjustments that would have been necessary to correct the reported amounts. (Negative answers should be indicated by a min sign.) a. Cost of goods sold: Reported Adjustments: Dec. 31, 2020 error Dec. 31, 2021 error Corrected b. Profit: Reported Adiustments: Dec. 31. 2020 error $ $ Financial Statements for Year Ended December 31. 2022 2020 2021 $ 765,000 $ 897,000 $ 820,000 270,000 325,000 281,000 1,255,000 1,365,000 1,200,000 1,387,000 1,530,000 1,332,000 $ 2020 765,000 $ (80,000) 2021 270,000 $ 80.000 685,000 $ 999,000 $ 897,000 $ 820,000 80,000 22,000 2022 325,000 $ (80.000) (22,000) 798,000 281,000 Numbers

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 59E: Effects of an Error in Ending Inventory Waymire Company prepared the partial income statements...

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Assuming a companys year-end inventory were understated by $16,000, indicate the effect (overstated/understated/no effect) of the error on the following balance sheet and income statement accounts. A. Income Statement: Cost of Goods Sold B. Income Statement: Net Income C. Balance Sheet: Assets D. Balance Sheet: Liabilities E. Balance Sheet: Equity
If Wakowski Companys ending inventory was actually $86,000 but was adjusted at year end to a balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?
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If a group of inventory items costing $3,200 had been double counted during the year-end inventory count, what impact would the error have on the following inventory calculations? Indicate the effect (and amount) as either (a) none, (b) understated $______, or (c) overstated $______. Table 10.2
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