Business
AccountingFinancial And Managerial AccountingFonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20Y1, Fonda incorrectly counted its inventory as $452,500 instead of the correct amount of $425,500. a. State the effects of the error on the December 31, 20Y1, balance sheet of Fonda Motorcycle Shop. b. State the effects of the error on the income statement of Fonda Motorcycle Shop for the year ended December 31, 20Y1. c. If uncorrected, what would be the effects of the error on the 20Y2 income statement? d. If uncorrected, what would be the effects of the error on the December 31, 20Y2, balance sheet?Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20Y1, Fonda incorrectly counted its inventory as $452,500 instead of the correct amount of $425,500. a. State the effects of the error on the December 31, 20Y1, balance sheet of Fonda Motorcycle Shop. b. State the effects of the error on the income statement of Fonda Motorcycle Shop for the year ended December 31, 20Y1. c. If uncorrected, what would be the effects of the error on the 20Y2 income statement? d. If uncorrected, what would be the effects of the error on the December 31, 20Y2, balance sheet?
BuyFindlaunch
Financial And Managerial Accounting
15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
BuyFindlaunch
Financial And Managerial Accounting
15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Solutions
Chapter
Section
Chapter 6, Problem 18E
Textbook Problem
Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20Y1, Fonda incorrectly counted its inventory as $452,500 instead of the correct amount of $425,500.
- a. State the effects of the error on the December 31, 20Y1, balance sheet of Fonda Motorcycle Shop.
- b. State the effects of the error on the income statement of Fonda Motorcycle Shop for the year ended December 31, 20Y1.
- c. If uncorrected, what would be the effects of the error on the 20Y2 income statement?
- d. If uncorrected, what would be the effects of the error on the December 31, 20Y2, balance sheet?
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Financial And Managerial Accounting
Ch. 6 - Before inventory purchases are recorded, the...Ch. 6 - Why is it important to take a physical inventory...Ch. 6 - Do the terms FIFO, LIFO, and weighted average...Ch. 6 - If inventory is being valued at cost and the price...Ch. 6 - Which of the three methods of inventory...Ch. 6 - If inventory is being valued at lost and the price...Ch. 6 - Using the following data, how should the inventory...Ch. 6 - The inventory at the end of the year was...Ch. 6 - Hutch Co. sold merchandise to Bibbins Company on...Ch. 6 - A manufacturer shipped merchandise to a retailer...
Ch. 6 - Cost flow methods The following three identical...Ch. 6 - Perpetual inventory using FIFO Beginning...Ch. 6 - Perpetual inventory using LIFO Beginning...Ch. 6 - Beginning inventory, purchases, and sales for...Ch. 6 - The units of an item available for sale during the...Ch. 6 - On the basis of the following data, determine the...Ch. 6 - Effect of inventory errors During the taking of...Ch. 6 - Financial statement data for years ending December...Ch. 6 - Control of inventories Triple Creek Hardware Store...Ch. 6 - Control of inventories Hardcase Luggage Shop is a...Ch. 6 - Perpetual inventory using FIFO Beginning...Ch. 6 - Perpetual inventory using LIFO Assume that the...Ch. 6 - Perpetual inventory using LIFO Beginning...Ch. 6 - Perpetual inventory using FIFO Assume that the...Ch. 6 - FIFO and LIFO costs under perpetual inventory...Ch. 6 - Weighted average cost flow method under perpetual...Ch. 6 - Weighted average cost flow method under perpetual...Ch. 6 - Assume that the business in Exercise 6-9 maintains...Ch. 6 - Assume that the business in Exercise 6-9 maintains...Ch. 6 - The units of an item available for sale during the...Ch. 6 - Periodic inventory by three methods; cost of goods...Ch. 6 - Comparing inventory methods Assume that a firm...Ch. 6 - On the basis of the following data, determine the...Ch. 6 - Based on the data in Exercise 6-15 part (a) and...Ch. 6 - Effect of errors in physical inventory Madison...Ch. 6 - Fonda Motorcycle Shop sells motorcycles, ATVs, and...Ch. 6 - Error in inventory During 20Y5, the accountant...Ch. 6 - Retail method A business using the retail method...Ch. 6 - Retail method A business using the retail method...Ch. 6 - Retail method A business using the retail method...Ch. 6 - Retail method On the basis of the following data,...Ch. 6 - Gross profit method The inventory was destroyed by...Ch. 6 - Gross profit method Based on the following data,...Ch. 6 - Gross profit method Based on the following data,...Ch. 6 - FIFO perpetual inventory The beginning inventory...Ch. 6 - The beginning inventory at Midnight Supplies and...Ch. 6 - The beginning inventory for Midnight Supplies and...Ch. 6 - Periodic inventory by three methods The beginning...Ch. 6 - Periodic inventory by three methods Dymac...Ch. 6 - Lower-of-cost-or-market inventory Data on the...Ch. 6 - Retail method; gross profit method Selected data...Ch. 6 - FIFO perpetual inventory The beginning inventory...Ch. 6 - LIFO perpetual inventory The beginning inventory...Ch. 6 - Weighted average cost method with perpetual...Ch. 6 - Periodic inventory by three methods The beginning...Ch. 6 - Pappas Appliances uses the periodic inventory...Ch. 6 - Lower-of-cost-or-market inventory Data on the...Ch. 6 - Retail method; gross profit method Selected data...Ch. 6 - Amazon.com, Inc. (AMZN) is one of the largest...Ch. 6 - Darden Restaurants, Inc. (DRI) is the largest...Ch. 6 - The general merchandise retail industry has a...Ch. 6 - Monster Beverage Corporation (MNST) develops,...Ch. 6 - Ethics in Action Sizemo Elektroniks sells...Ch. 6 - Anstead Co. is experiencing a decrease in sales...Ch. 6 - Communication Golden Eagle Company began...
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