Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780134078939
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 6, Problem 6.23E
a.
To determine
Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.
To Calculate: The correct gross profit.
b.
To determine
To Calculate: The correct gross profit.
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Students have asked these similar questions
Hudson River Bakery reported net sales revenue of $59,000 and cost of goods sold of $32,000.
Compute Hudson River's correct gross profit if the company made either of the following independent accounting errors.
a. Ending merchandise inventory is overstated by $8,000.
b. Ending merchandise inventory is understated by $8,000.
Net sales revenue
Cost of goods sold
Gross profit
As Reported
Incorrect
S
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Cost of Goods Sold and Gross Profit
Corrected for the Error
Ending Merchandise Inventory:
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$8,000
$8,000
59,000 $
32,000
59,000 $
59,000
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Compute Hudson River's correct gross profit if the company made either of the following independent accounting
errors.
a. Ending merchandise inventory is overstated by $3,000
b. Ending merchandise inventory is understated by $3,000.
Net sales revenue
Cost of goods sold
Gross profit
As Reported
Incorrect
Cost of Goods Sold and Gross Profit
Corrected for the Error
Ending Merchandise Inventory:
(a) Overstated by (b) Understated by
$3,000
$3,000
56,000 $
13,000
56,000 $
56,000
Aunt Martha Bakery reported net sales revenue of $39,000 and cost of goods sold of $28,000.
Compute Aunt Martha's correct gross profit if the company made either of the following independent accounting
errors.
a. Ending merchandise inventory is overstated by $7,000.
b. Ending merchandise inventory is understated by $7,000.
Net sales revenue
Cost of goods sold
Gross profit
Cost of Goods Sold and Gross Profit
Corrected for the Error
Ending Merchandise Inventory:
As Reported (a) Overstated by (b) Understated by
Incorrect
$7,000
$7,000
39,000 $
28,000
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Chapter 6 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
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 - Determining inventory costing methods Ward Hard...Ch. 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 - Use the following information to answer Short...Ch. 6 - Comparing Cost of Goods Sold under FIFO, UFO, and...Ch. 6 - Applying the lower-of-cost-or-market rule Assume...Ch. 6 - Determining the effect of an inventory error...Ch. 6 - Computing the rate of inventory turnover and days...Ch. 6 - Use the following information to answer Short...Ch. 6 - Prob. 6.12SECh. 6 - Prob. 6.13SECh. 6 - Using accounting vocabulary Match the accounting...Ch. 6 - Comparing inventory methods Zippy, a regional...Ch. 6 - Prob. 6.16ECh. 6 - Use the following information to answer Exercises...Ch. 6 - Use the following information to answer Exercises...Ch. 6 - Comparing amounts for cost of goods sold, ending...Ch. 6 - Comparing cost of goods sold and gross...Ch. 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 - Accounting for inventory using the perpetual...Ch. 6 - Accounting for inventory using the perpetual...Ch. 6 - Prob. 6.30APCh. 6 - Correcting inventory errors over a three-year...Ch. 6 - Accounting for inventory using the periodic...Ch. 6 - Accounting for inventory using the perpetual...Ch. 6 - Prob. 6.34BPCh. 6 - Prob. 6.35BPCh. 6 - Prob. 6.36BPCh. 6 - Prob. 6.37BPCh. 6 - Prob. 6.38CPCh. 6 - Accounting for inventory using the perpetual...Ch. 6 - Suppose you manage Campbell Appliance. The stores...Ch. 6 - Ever since he was a kid, Carl Montague wanted to...Ch. 6 - The notes are an important part of a companys...
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