INTERMEDIATE ACCOUNTING RMU 9TH EDITION
9th Edition
ISBN: 9781260998726
Author: SPICELAND
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 20, Problem 20.13Q
To determine
Merchandise Inventory
The goods that are acquired by the middlemen from the owner of the goods with the motive of selling the goods to the third parties are called the merchandise inventory.
To identify: The effect of net income for the year 2018 for the error that is not discovered in the year ended 2017.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
If merchandise inventory is understated at the end of 2015, and the error is not discovered, how will net income be affected in 2016?
what is the net effect of the errors in the 2018 net income?
If ending inventory is overstated in the current fiscal year, what effect will this have on net income for the next fiscal year?
a.Net income would be understated.
b.Net income would only be affected in the current fiscal year, and it would be understated.
c.There would be no effect on net income.
d.Net income would be overstated.
Chapter 20 Solutions
INTERMEDIATE ACCOUNTING RMU 9TH EDITION
Ch. 20 - Prob. 20.1QCh. 20 - There are three basic accounting approaches to...Ch. 20 - Prob. 20.3QCh. 20 - Lynch Corporation changes from the...Ch. 20 - Sugarbaker Designs Inc. changed from the FIFO...Ch. 20 - Most changes in accounting principles are recorded...Ch. 20 - Southeast Steel, Inc., changed from the FIFO...Ch. 20 - Prob. 20.8QCh. 20 - Its not easy sometimes to distinguish between a...Ch. 20 - For financial reporting, a reporting entity can be...
Ch. 20 - Prob. 20.11QCh. 20 - Describe the process of correcting an error when...Ch. 20 - Prob. 20.13QCh. 20 - If it is discovered that an extraordinary repair...Ch. 20 - Prob. 20.15QCh. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; average cost method...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 Irwin, Inc.,...Ch. 20 - Prob. 20.5BECh. 20 - Book royalties LO204 Three programmers at Feenix...Ch. 20 - Warranty expense LO204 In 2017, Quapau Products...Ch. 20 - Change in estimate; useful life of patent LO204...Ch. 20 - Prob. 20.9BECh. 20 - Error correction LO206 In 2018, internal auditors...Ch. 20 - Prob. 20.11BECh. 20 - Error correction LO206 In 2018, the internal...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change from the treasury stock method to retired...Ch. 20 - Change in principle; change to the equity method ...Ch. 20 - Prob. 20.5ECh. 20 - FASB codification research LO202 Access the FASB...Ch. 20 - Change in principle; change in inventory cost...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 For...Ch. 20 - Change in depreciation methods LO203 The Canliss...Ch. 20 - Book royalties LO204 Dreighton Engineering Group...Ch. 20 - Loss contingency LO204 The Commonwealth of...Ch. 20 - Warranty expense LO204 Woodmier Lawn Products...Ch. 20 - Prob. 20.15ECh. 20 - Accounting change LO204 The Peridot Company...Ch. 20 - Change in estimate; useful life and residual value...Ch. 20 - Classifying accounting changes LO201 through...Ch. 20 - Error correction; inventory error LO206 During...Ch. 20 - Error corrections; investment LO206 Required: 1....Ch. 20 - Prob. 20.21ECh. 20 - Prob. 20.22ECh. 20 - Prob. 20.23ECh. 20 - Inventory errors LO206 Indicate with the...Ch. 20 - Classifying accounting changes and errors LO201...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - P 20-2 Change in principle; change in method of...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - Change in inventory methods LO202 The Rockwell...Ch. 20 - Change in inventory methods LO202 Fantasy...Ch. 20 - Change in principle; change in depreciation...Ch. 20 - Depletion; change in estimate LO204 In 2018, the...Ch. 20 - Accounting changes; six situations LO201, LO203,...Ch. 20 - Prob. 20.9PCh. 20 - Inventory errors LO206 You have been hired as the...Ch. 20 - Error correction; change in depreciation method ...Ch. 20 - Accounting changes and error correction; seven...Ch. 20 - Prob. 20.13PCh. 20 - Prob. 20.14PCh. 20 - Prob. 20.15PCh. 20 - Prob. 20.16PCh. 20 - Prob. 20.17PCh. 20 - Integrating Case 201 Change to dollar-value LIFO ...Ch. 20 - Prob. 20.2BYPCh. 20 - Prob. 20.3BYPCh. 20 - Analysis Case 204 Change in inventory methods;...Ch. 20 - Prob. 20.5BYPCh. 20 - Prob. 20.6BYPCh. 20 - Analysis Case 208 Various changes LO201 through...Ch. 20 - Analysis Case 209 Various changes LO201 through...Ch. 20 - Prob. 20.10BYPCh. 20 - Prob. 20.11BYPCh. 20 - Prob. 20.12BYPCh. 20 - Prob. 1CCTC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- In 2019, ending inventory is overstated. What is the effect of the error on net income in 2019 and 2020? A. Net income is understated in 2019 and 2020. B. Net income is understated in 2019 and overstated in 2020. C. Net income is overstated in 2019 and understated in 2020. D. Net income is overstated in 2019 and 2020.arrow_forwardWhich of the following errors will normally result in overstatement of 2017 net income? O failure to record merchandise purchases in 2016 failure to record accrued salaries expense in 2016 understatement of 2016 ending merchandise inventory O overstatement of prepaid expense in 2016arrow_forwardIf the beginning inventory for 2025 is overstated, the effects of this error on cost of goods sold for 2025, net income for 2025, and assets at December 31, 2026, respectively, are Ⓒ understatement, overstatement, no effect. O understatement, overstatement, overstatement. Ⓒoverstatement, understatement, no effect. O overstatement, understatement, overstatement.arrow_forward
- If the ending inventory is overstated in the current year: Net income will be understated in the current year. Next year's beginning inventory will also be overstated. Next year's net income will be overstated. Next year's beginning inventory will be understated.arrow_forwardWhat is the net effect of the above errors in the 2021 net income? (If understated, put a negative (-) sign before the numerical value)arrow_forwardSeveral errors are listed below. Indicate the effect each error would have on 2020 net income by selecting a plus sign (+), minus sign (-) or NI (no impact). Part (a) has been completed as an example. Effect on 2020Net Income a. Failed to record a 2020 expense. + b. Ending 2019 inventory is understated. c. Ending 2020 accrued expense is overstated. d. Ending 2020 inventory is overstated. e. Ending 2019 accrued revenue is understated. f. Ending 2020 prepaid expense is overstated. g. Ending 2019 unearned revenue is overstated. h. Ending 2020 accrued revenue was overstated. i. Ending 2019 prepaid expense was overstated. j. Ending 2019 accrued expense is overstated. k. Ending 2020 unearned revenue is understated.arrow_forward
- 1. If ending inventory on December 31, 2019, is overstated, then, a) cost of goods sold for the year ended December 31, 2020, will be understated. b) gross profit for the year ended December 31, 2019, will be understated. c) gross profit for the year ended December 31, 2020, will be understated. d) cost of goods sold for the year ended December 31, 2019, will be overstated.arrow_forwardShow how the following independent errors will affect net income on 2020. Choose if its overstated, understated and no effect Ending inventory in 2020 overstated Failed to accrue 2020 interest revenue Failed to count office supplies on hand at 12/31/20. Cash expenditures have been charged to an office supplies expense account during the year 2020 Ending inventory in 2020 understated Overstated 2020 depreciation expense; 2021 expense correct Ending inventory in 2020 overstated Failed to accrue 2020 interest revenue A capital expenditure for factory equipment (useful life, 5 years) was erroneously charged to maintenance expense in 2020 Failed to count office supplies on hand at 12/31/20. Cash expenditures have been charged to an office supplies expense account during the year 2020. Row Failed to accrue 2020 wages Ending inventory in 2020 understated Overstated 2020 depreciation expense; 2021 expense correctarrow_forwardWhat was the reason for the FASB changing the accounting method for reporting lower-of-cost-or-market inventory in 2015?arrow_forward
- Suppose Ajax Corporation overstates its ending inventory amount. What effect will this have on the reported amount of cost of goods sold in the year of the error? a. Overstate cost of goods sold.b. Understate cost of goods sold.c. Have no effect on cost of goods sold.d. Not possible to determine with information given.arrow_forwardMerchandise inventory at the end of the year is overstated. Which of the following statements correctly states the effect of the error? Da. Gross profit is understated. Ob. Owner's equity is overstated. Oc. Net income is understated. Od. Cost of merchandise sold is overstated.arrow_forwardIf a company understates its inventory, what are the effects on cost of goods sold and net income for the current year?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Accounting Changes and Error Analysis: Intermediate Accounting Chapter 22; Author: Finally Learn;https://www.youtube.com/watch?v=c2uQdN53MV4;License: Standard Youtube License