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Missouri River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 20Y2, Missouri River Supply incorrectly counted its inventory as $233,400 instead of the correct amount of $238,600. a. State the effect of the error on the December 31, 20Y2, balance sheet of Missouri River Supply. b. State the effect of the error on the income statement of Missouri River Supply for the year ended December 31, 20Y2. c. If uncorrected, what would be the effect of the error on the 20Y3 income statement? d. If uncorrected, what would be the effect of the error on the December 31, 20Y3, balance sheet?

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Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

Solutions

Chapter
Section
Problem 1DQ
Problem 2DQ
Problem 3DQ
Problem 4DQ
Problem 5DQ
Problem 6DQ
Problem 7DQ
Problem 8DQ
Problem 9DQ
Problem 10DQ
Problem 1PEA
Problem 1PEB
Problem 2PEA
Problem 2PEB
Problem 3PEA
Problem 3PEB
Problem 4PEA
Problem 4PEB
Problem 5PEA
Problem 5PEB
Problem 6PEA
Problem 6PEB
Problem 7PEA
Problem 7PEB
Problem 8PEA
Problem 8PEB
Problem 1E
Problem 2E
Problem 3E
Problem 4E
Problem 5E
Problem 6E
Problem 7E
Problem 8E
Problem 9E
Problem 10E
Problem 11E
Problem 12E
Problem 13E
Problem 14E
Problem 15E
Problem 16E
Problem 17E
Problem 18E
Problem 19E
Problem 20E
Problem 21E
Problem 22E
Problem 23E
Problem 24E
Problem 25E
Problem 26E
Problem 27E
Problem 28E
Problem 1PA
Problem 2PA
Problem 3PA
Problem 4PA
Problem 5PA
Problem 6PA
Problem 7PA
Problem 1PB
Problem 2PB
Problem 3PB
Problem 4PB
Problem 5PB
Problem 6PB
Problem 7PB
Problem 1CP
Problem 2CP
Problem 4CP
Problem 5CP
Problem 6CP
Problem 7CP
BuyFindarrow_forward

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
Chapter 7, Problem 17E
Textbook Problem
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Missouri River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 20Y2, Missouri River Supply incorrectly counted its inventory as $233,400 instead of the correct amount of $238,600.

  1. a. State the effect of the error on the December 31, 20Y2, balance sheet of Missouri River Supply.
  2. b. State the effect of the error on the income statement of Missouri River Supply for the year ended December 31, 20Y2.
  3. c. If uncorrected, what would be the effect of the error on the 20Y3 income statement?
  4. d. If uncorrected, what would be the effect of the error on the December 31, 20Y3, balance sheet?

(a)

To determine

Indicate the effect of misstatement on MRS Company in their balance sheet.

Explanation of Solution

Inventory error: Inventory errors are sometimes caused by making mistake, in physical count, in pricing the inventory correctly, or in recognizing the transfer of title for the goods in transit. These inventory errors affect both the income statement as well as the balance sheet...

(b)

To determine

Indicate the effect of misstatement on MRS Company in their income statement.

(c)

To determine

Indicate the effect on MRS Company in their income statement on the next year if the mistake is uncorrected.

(d)

To determine

Indicate the effect on MRS Company in their balance sheet on the next year if the mistake is uncorrected.

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