During the taking of its physical inventory on December 31, 20Y3, Waterjet Bath Company incorrectly counted its inventory as $728,660 instead of the correct amount of $719,880.

Effect of Inventory Errors

During the taking of its physical inventory on December 31, 20Y3, Waterjet Bath Company incorrectly counted its inventory as $728,660 instead of the correct amount of $719,880. Indicate the effect of the misstatement on Waterjet Bath's December 31, 20Y3, balance sheet and income statement for the year ended December 31, 20Y3. Also record the amount of each overstatement or understatement. Enter all amounts as positive numbers.

Solutions

Expert Solution

Inventory	Balance Sheet	Overstated	$8,780
Current assets	Balance Sheet	Overstated	$8,780
Total assets	Balance Sheet	Overstated	$8,780
Stockholders' equity	Balance Sheet	Overstated	$8,780
Cost of goods sold	Income Statement	Understated	$8,780
Gross profit	Income Statement	Overstated	$8,780
Net income	Income Statement	Overstated	$8,780

Difference in amount = $728,660 - $719,880 = $8,780

ekkarill92 answered 2 years ago

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