Inventory at the end of 2021 was overstated. What is its effect net income of year 2022? O Cannot be determined from the given information O Understated O No Effect O Overstated
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- Assuming that ending inventory is correctly counted at the end of 2022, what effect will the inventory error in 2021 have on reported amounts for (a) ending inventory, (b) retained earnings, (c) cost of goods sold, and (d) net income (ignoring tax effects) in 2022?If merchandise inventory is understated at the end of 2020, and the error is not discovered, how will net income be affected in 2021?PLEASE ANSWER ASAP. I WILL DO THUMBS UP. THANK YOU SO MUCH. 1. Inventory at the end of 2021 was overstated. What is its effect net income of year 2022? a. Overstated b. Cannot be determined from the given information c. No Effect d. Understated 2. Uneamed Rent Income was not recognized in year 2021. What is its effect net income of 2021? a. Cannot be determined from the given information b. Overstated c. Understated d. No Effect 3.Which of the following is not an example of error? O a. Incorrect classincation of an expenditure as between expense and asset. b. Recognition of gain on fully depreciated property. c. Failure to recognize accrual and deferral. d. Misstatement of asset, liability or equity 4. Accrued interest income was overlooked in year 2021, what is its effect in Net income of 2023? a. Understated b. No Effect O c. Cannot be determined from the given information d. Overstated 5.Accrued salaries expense is overlooked in year 2021, what is its effect in the net income of…
- Assume that in 2021, Graham Company discovered that December 31, 2019 inventory was overstated. Discuss the impact that this error would have had on 2019 net income, 2020 net income and the combined net income of the two years.If 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.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.
- For the fiscal year ended May 31, 2020, determine the amount of the gain or loss that would be recorded (using the loss method) due to the change in Allowance to Reduce Inventory to NRV. (Enter loss using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) The amount of the gain (loss) $It is discovered in 2021 that ending inventory in 2019 was understated. What is the effect of the understatement on the following:2019: Cost of goods sold Net income Ending retained earnings2020: Net purchases Cost of goods sold Net income Ending retained earningsSeveral 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.
- What is the effect of a $51000 overstatement of last year's inventory on current years ending retained earning balance? Overstated by $51000. No effect. Understated by $51000. Need more information to determine.If merchandise inventory is understated at the end of 2017, and the error is not discovered, how will net incomebe affected in 2018?What is the net effect of the above errors in the 2021 net income? (If understated, put a negative (-) sign before the numerical value)