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AccountingAccounting (Text Only)26th Edition

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Chapter 7, Problem 7.18EX
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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

Solutions

Chapter
Section
Problem 1DQ
Problem 2DQ
Problem 3DQ
Problem 4DQ
Problem 5DQ
Problem 6DQ
Problem 7DQ
Problem 8DQ
Problem 9DQ
Problem 10DQ
Problem 7.1APE
Problem 7.1BPE
Problem 7.2APE
Problem 7.2BPE
Problem 7.3APE
Problem 7.3BPE
Problem 7.4APE
Problem 7.4BPE
Problem 7.5APE
Problem 7.5BPE
Problem 7.6APE
Problem 7.6BPE
Problem 7.7APE
Problem 7.7BPE
Problem 7.8APE
Problem 7.8BPE
Problem 7.1EX
Problem 7.2EX
Problem 7.3EX
Problem 7.4EX
Problem 7.5EX
Problem 7.6EX
Problem 7.7EX
Problem 7.8EX
Problem 7.9EX
Problem 7.10EX
Problem 7.11EX
Problem 7.12EX
Problem 7.13EX
Problem 7.14EX
Problem 7.15EX
Problem 7.16EX
Problem 7.17EX
Problem 7.18EX
Problem 7.19EX
Problem 7.20EX
Problem 7.21EX
Problem 7.22EX
Problem 7.23EX
Problem 7.24EX
Problem 7.25EX
Problem 7.26EX
Problem 7.27EX
Problem 7.28EX
Problem 7.1APR
Problem 7.2APR
Problem 7.3APR
Problem 7.4APR
Problem 7.5APR
Problem 7.6APR
Problem 7.7APR
Problem 7.1BPR
Problem 7.2BPR
Problem 7.3BPR
Problem 7.4BPR
Problem 7.5BPR
Problem 7.6BPR
Problem 7.7BPR
Problem 7.1CP
Problem 7.2CP
Problem 7.3CP
Problem 7.4CP
Problem 7.5CP
Problem 7.6CP
BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
17 views

Effect of errors in physical inventory

Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 2016, Fonda Motorcycle Shop incorrectly counted its inventory as $337,500 instead of the correct amount of $328,850.

a. State the effect of the error on the December 31, 2016, balance sheet of Fonda Motorcycle Shop.

b. State the effect of the error on the income statement of Fonda Motorcycle Shop for the year ended December 31, 2016.

c. If uncorrected, what would be the effect of the error on the 2017 income statement?

d. If uncorrected, what would be the effect of the error on the December 31, 2017, balance sheet?

(a)

To determine

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.

To indicate: the effect of misstatement on FM shop in their balance sheet.

Explanation

The inventory at the year-end is overstated. When inventory is overstated, current assets would also be overstated. As a result, total assets would be overstated...

(b)

To determine

To indicate: the effect of misstatement on FM shop in their income statement.

(c)

To determine

To indicate: the effect on FM shop in their income statement on the next year if the mistake is uncorrected.

(d)

To determine

To indicate: the effect on FM shop in their balance sheet on the next year if the mistake is uncorrected.

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Ch-7 P-1DQCh-7 P-2DQCh-7 P-3DQCh-7 P-4DQCh-7 P-5DQCh-7 P-6DQCh-7 P-7DQCh-7 P-8DQCh-7 P-9DQCh-7 P-10DQ
Ch-7 P-7.1APECh-7 P-7.1BPECh-7 P-7.2APECh-7 P-7.2BPECh-7 P-7.3APECh-7 P-7.3BPECh-7 P-7.4APECh-7 P-7.4BPECh-7 P-7.5APECh-7 P-7.5BPECh-7 P-7.6APECh-7 P-7.6BPECh-7 P-7.7APECh-7 P-7.7BPECh-7 P-7.8APECh-7 P-7.8BPECh-7 P-7.1EXCh-7 P-7.2EXCh-7 P-7.3EXCh-7 P-7.4EXCh-7 P-7.5EXCh-7 P-7.6EXCh-7 P-7.7EXCh-7 P-7.8EXCh-7 P-7.9EXCh-7 P-7.10EXCh-7 P-7.11EXCh-7 P-7.12EXCh-7 P-7.13EXCh-7 P-7.14EXCh-7 P-7.15EXCh-7 P-7.16EXCh-7 P-7.17EXCh-7 P-7.18EXCh-7 P-7.19EXCh-7 P-7.20EXCh-7 P-7.21EXCh-7 P-7.22EXCh-7 P-7.23EXCh-7 P-7.24EXCh-7 P-7.25EXCh-7 P-7.26EXCh-7 P-7.27EXCh-7 P-7.28EXCh-7 P-7.1APRCh-7 P-7.2APRCh-7 P-7.3APRCh-7 P-7.4APRCh-7 P-7.5APRCh-7 P-7.6APRCh-7 P-7.7APRCh-7 P-7.1BPRCh-7 P-7.2BPRCh-7 P-7.3BPRCh-7 P-7.4BPRCh-7 P-7.5BPRCh-7 P-7.6BPRCh-7 P-7.7BPRCh-7 P-7.1CPCh-7 P-7.2CPCh-7 P-7.3CPCh-7 P-7.4CPCh-7 P-7.5CPCh-7 P-7.6CP

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