MYLAB ACCOUNTING WITH PEARSON ETEXT --
7th Edition
ISBN: 2819120053883
Author: MILLER-NOBLES
Publisher: PEARSON
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PROBLEM:
Sharp Company received P 80,000 of inventory items on the last day of its fiscal year, May 31, 2022. The company employees a periodic inventory system. During your audit, you discovered the following:
Items Alpha were included in inventory at May 31, 2022, but the purchase was not recorded until June 3, 2022, P 100,000.
Items Bravo were excluded from the May 31, 2022 inventory, but the purchase was recorded on May 31, 2022, P 60,000.
Items Charlie were excluded from the May 31, 2022 inventory, the purchase was not recorded until June 3, 2022, P 50,000.
QUESTION:
What is the net effect on net income of the errors?
Scenario 1:Rocky Inc hired a new intern from CSU to help with year-end inventory. The intern
computed the inventory counts at the end of 2020 and 2021. However, the intern's manager,
a UNC grad, noticed that the ending inventory did not include inventory on consignment to a
retail customer of $3,000 at the end of year 2020 and $6,000 at the end of year 2021. What
was the effect of the error (if any] on 2021's statements (amount and whether it was under- (
too low) or over-stated (too high)? If there is no effect, put OK
For all exercises, assume the perpetual inventory system is used unless stated otherwise.
Correcting an inventory error—two years
Nature Foods Grocery.1 reported the following comparative income statements for the year ended June 30, 2019 and 2018:
During 2019, Nature Foods Grocery discovered that ending 2018 merchandise inventory was overstated by $5,500.
Requirements
Prepare corrected income statements for the two years.
State whether each year’s net income—before your corrections—is understated or overstated, and indicate the amount of the understatement or overstatement.
Chapter 6 Solutions
MYLAB ACCOUNTING WITH PEARSON ETEXT --
Ch. 6 - Which principle or concept states that businesses...Ch. 6 - Which inventory costing method assigns to ending...Ch. 6 - Assume Nile.com began April with 14 units of...Ch. 6 - Suppose Nile.com used the weighted-average...Ch. 6 - Which inventory costing method results in the...Ch. 6 - Prob. 6QCCh. 6 - At December 31, 2016, Stevenson Company overstated...Ch. 6 - Suppose Maestros had cost of goods sold during the...Ch. 6 - Suppose Nile.com used the LIFO inventory costing...Ch. 6 - Prob. 1RQ
Ch. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - What is the goal of conservatism?Ch. 6 - Prob. 5RQCh. 6 - Under a perpetual inventory system, what are the...Ch. 6 - Prob. 7RQCh. 6 - Prob. 8RQCh. 6 - What does the lower-of-cost-or-market (LCM) rule...Ch. 6 - What account is debited when recording the...Ch. 6 - What is the effect on cost of goods sold, gross...Ch. 6 - When does an inventory error cancel out, and why?Ch. 6 - Prob. 13RQCh. 6 - Prob. 14RQCh. 6 - Prob. 15ARQCh. 6 - Prob. 16ARQCh. 6 - Determining inventory accounting principles Ward...Ch. 6 - Prob. 6.2SECh. 6 - Prob. 6.3SECh. 6 - Use the following information to answer Short...Ch. 6 - Use the following information to answer Short...Ch. 6 - Use the following information to answer Short...Ch. 6 - Comparing Cost of Goods Sold under FIFO, UFO, and...Ch. 6 - Prob. 6.8SECh. 6 - Prob. 6.9SECh. 6 - Prob. 6.10SECh. 6 - Prob. 6.11SECh. 6 - Prob. 6.12SECh. 6 - Prob. 6.13SECh. 6 - Using accounting vocabulary Match the accounting...Ch. 6 - Prob. 6.15ECh. 6 - Prob. 6.16ECh. 6 - Use the following information to answer Exercises...Ch. 6 - Prob. 6.19ECh. 6 - Prob. 6.20ECh. 6 - Prob. 6.21ECh. 6 - Prob. 6.22ECh. 6 - Prob. 6.23ECh. 6 - Prob. 6.24ECh. 6 - Prob. 6.25ECh. 6 - Prob. 6.26ECh. 6 - Prob. 6.27ECh. 6 - Prob. 6.28APCh. 6 - Prob. 6.29APCh. 6 - Prob. 6.30APCh. 6 - Prob. 6.31APCh. 6 - Prob. 6.32APCh. 6 - Prob. 6.33BPCh. 6 - Prob. 6.34BPCh. 6 - Prob. 6.35BPCh. 6 - Prob. 6.36BPCh. 6 - Prob. 6.37BPCh. 6 - Prob. 6.38CPCh. 6 - Prob. 6.39PSCh. 6 - Prob. 6.1COPCh. 6 - Prob. 6.1CTDC
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